SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 1-12289
SEACOR HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 13-3542736
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 Westheimer, Suite 850
Houston, Texas 77042
(713) 782-5990
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [_] No
The total number of shares of Common Stock, par value $.01 per share,
outstanding as of November 11, 1996, was 13,100,282, not including 55,768 shares
of Common Stock held in the Registrant's treasury. Registrant has no other class
of Common Stock outstanding.
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SEACOR HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995...................1
Condensed Consolidated Statements of Operations for the
Three and Nine-Months Ended September 30, 1996 and 1995....2
Condensed Consolidated Statements of Cash Flows
for the Nine-Months Ended September 30, 1996 and 1995......3
Notes to Condensed Consolidated Financial Statements.......4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..............9
Part II. Other Information
Item 2. Changes in Securities...................................21
Item 5. Other Information.......................................22
Item 6. Exhibits and Reports on Form 8-K........................22
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
September 30, December 31,
1996 1995
-------------------- ------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and temporary cash investments $ 28,484 $ 28,786
Marketable securities 307 623
Trade and other receivables, net of allowance for
doubtful accounts of $459 and $380, respectively 44,479 32,900
Affiliate receivables 304 872
Inventories 1,487 1,602
Prepaid expenses and other 2,131 3,490
-------------------- ------------------
Total current assets 77,192 68,273
-------------------- ------------------
Investments in, at Equity, and Receivables from 50%
or Less Owned Companies 7,306 6,484
-------------------- ------------------
Property and Equipment 374,521 337,946
Less--Accumulated depreciation (92,392) (75,038)
-------------------- ------------------
Net property and equipment 282,129 262,908
-------------------- ------------------
Other Assets 11,944 13,218
-------------------- ------------------
378,571 350,883
==================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt 276 2,489
Accounts payable - trade 12,190 7,742
Accounts payable - affiliates 1,983 -
Other current liabilities 11,933 9,519
-------------------- ------------------
Total current liabilities 26,382 19,750
-------------------- ------------------
Long-Term Debt, Less Debt Discount of $2,188 in 1995 7,955 108,066
Deferred Income Taxes 38,071 36,182
Deferred Gain and Other Liabilities 1,980 1,474
Minority Interest and Indebtedness to Shareholder 1,853 1,947
Stockholders' Equity:
Common stock, $.01 par value, 13,155,250 and 9,886,393
shares issued at September 30, 1996, and
December 31, 1995, respectively 131 99
Additional paid-in capital 223,853 127,317
Retained earnings 80,539 57,852
Less 55,768 shares held in treasury at September 30,1996,
and December 31, 1995, at cost (576) (576)
Less unamortized restricted stock compensation (747) (159)
Currency translation adjustments (870) (1,069)
-------------------- ------------------
Total stockholders' equity 302,330 183,464
-------------------- ------------------
$ 378,571 $ 350,883
==================== ==================
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
AND SHOULD BE READ IN CONJUNCTION HEREWITH.
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SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA, UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operating Revenue:
Marine $ 50,307 $ 24,368 $ 138,043 $ 65,957
Environmental -
Oil spill response 2,628 7,728 8,547 8,367
Retainer and other services 4,610 3,930 13,703 7,721
------------- ------------- ------------- -------------
57,545 36,026 160,293 82,045
------------- ------------- ------------- -------------
Costs and Expenses:
Costs of oil spill response 2,263 6,956 7,655 7,117
Operating expenses -
Marine 27,110 15,818 77,137 42,819
Environmental 1,747 1,303 4,511 2,874
Administrative and general 5,759 3,592 16,876 8,249
Depreciation and amortization 6,249 4,665 17,791 12,773
------------- ------------- ------------- -------------
43,128 32,334 123,970 73,832
------------- ------------- ------------- -------------
Operating Income 14,417 3,692 36,323 8,213
------------- ------------- ------------- -------------
Other (Expense) Income:
Interest on debt (555) (1,250) (4,007) (4,149)
Interest income 689 269 1,731 1,788
Gain (loss) from equipment sales or retirements 926 (359) 1,448 1,814
McCall acquisition costs (37) - (509) -
Other, net (299) 21 11 248
------------- ------------- ------------- -------------
724 (1,319) (1,326) (299)
------------- ------------- ------------- -------------
Income Before Income Taxes, Minority Interest, Equity in Net
Earnings of 50% or Less Owned Companies and
Extraordinary Item 15,141 2,373 34,997 7,914
Income Tax Expense 5,240 863 12,445 2,852
------------- ------------- ------------- -------------
Income Before Minority Interest, Equity in Net Earnings of 50%
or Less Owned Companies and Extraordinary Item 9,901 1,510 22,552 5,062
Minority Interest in Loss of a Subsidiary 29 81 176 250
Equity in Net Earnings of 50% or Less Owned Companies 325 246 766 746
------------- ------------- ------------- -------------
Income Before Extraordinary Item 10,255 1,837 23,494 6,058
Extraordinary Item - Loss on Extinguishment of Debt 807 - 807 -
------------- ------------- ------------- -------------
Net Income $ 9,448 $ 1,837 $ 22,687 $ 6,058
============= ============= ============= =============
Earnings Per Common Share -- Assuming No Dilution:
Income before Extraordinary Item $ 0.78 $ 0.25 $ 2.15 $ 0.82
Extraordinary Item (0.06) - (0.07) -
------------- ------------- ------------- -------------
Net Income $ 0.72 $ 0.25 $ 2.08 $ 0.82
============= ============= ============= =============
Earnings Per Common Share -- Assuming Full Dilution:
Income before Extraordinary Item $ 0.77 $ 0.24 $ 1.93 $ 0.80
Extraordinary Item (0.06) - (0.06) -
------------- ------------- ------------- -------------
Net Income $ 0.71 $ 0.24 $ 1.87 $ 0.80
============= ============= ============= =============
Weighted Average Common Shares:
Assuming No Dilution 13,074,963 7,435,320 10,923,340 7,358,055
Assuming Full Dilution 13,347,014 9,890,728 12,725,616 9,813,463
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
AND SHOULD BE READ IN CONJUNCTION HEREWITH.
2
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SEACOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
Nine Months Ended September 30,
1996 1995
----------------- ------------------
<S> <C> <C>
Net Cash Provided by Operating Activities $ 40,455 $ 5,378
----------------- ------------------
Cash Flows from Investing Activities:
Purchase of property and equipment (37,382) (1,767)
Purchase of marketable securities (326) -
Proceeds from sale of marketable securities 642 -
Investments in and advances to 50% or less owned companies (293) (870)
Cash acquired in a business combination - 1,966
Assets acquired from John E. Graham & Sons - (72,854)
Principal payments received under a sale-type lease 133 -
Principal payments on notes due from 50% or
less owned companies 747 -
Proceeds from sale of equipment 2,318 4,076
Other 288 -
----------------- ------------------
Net cash used in investing activities (33,873) (69,449)
----------------- ------------------
Cash Flows from Financing Activities:
Principal payments on long-term debt (50,733) (19,052)
Payment of public offering costs (448) -
Net proceeds from sale of common stock 37,679 -
(Payments) proceeds on stockholders' loans (1,596) 242
Proceeds from issuance of long-term debt 7,711 74,000
Proceeds from exercise of stock options 489 -
Purchase of 6% convertible subordinated notes - (1,980)
----------------- ------------------
Net cash (used) provided in financing activities (6,898) 53,210
----------------- ------------------
Effect of Exchange Rate Changes
on Cash and Cash Equivalents 14 (2)
----------------- ------------------
Net Decrease in Cash and Cash Equivalents (302) (10,863)
Cash and Cash Equivalents, Beginning of Period 28,786 44,332
----------------- ------------------
Cash and Cash Equivalents, End of Period $ 28,484 $ 33,469
================= ==================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
AND SHOULD BE READ IN CONJUNCTION HEREWITH.
3
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SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION --
The condensed consolidated financial information for the three and nine-month
periods ended September 30, 1996, and the three and nine-month periods ended
September 30, 1995, has been prepared by the Company and was not audited by its
independent public accountants. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations, and cash flows at September 30,
1996, and for all periods presented have been made. Results of operations for
the interim periods presented are not necessarily indicative of the operating
results for the full year or any future periods.
On May 31, 1996, the Company acquired McCall Enterprises, Inc. and affiliated
companies pursuant to a series of merger and share exchange agreements. This
acquisition has been accounted for as a pooling-of-interests. The financial
statements included herein are based upon the assumption that the companies were
combined for the nine-months ended September 30, 1996, and the financial
statements of the prior year have been restated to give effect to the business
combination.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and
related notes thereto included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 and the Company's Current Report on Form
8-K dated May 31, 1996 and filed with the Securities and Exchange Commission
on June 14, 1996.
2. EARNINGS PER SHARE --
Earnings per common share assuming no dilution were computed based on the
weighted average number of unrestricted and restricted common shares issued and
outstanding during the relevant periods. The additional common stock assumed to
be outstanding to reflect the dilutive effect of common stock equivalents was
excluded from the computation as insignificant.
Earnings per common share assuming full dilution were computed based on the
weighted average number of unrestricted and restricted common shares issued and
outstanding, additional shares assumed to be outstanding to reflect the dilutive
effect of common stock equivalents using the treasury stock method, and the
assumption that all convertible subordinated notes were converted to common
stock. Net income has been adjusted for interest expense and debt discount
amortization (net of income tax) associated with the convertible subordinated
notes. During July 1996, all of the Company's then outstanding Convertible
Subordinated Notes were converted into shares of the Company's common stock.
3. LONG-TERM DEBT --
During the nine months ended September 30, 1996, indebtedness of the Company's
borrowing subsidiaries to Den norske Bank A/S ("DnB") under the revolving credit
facility dated September 15, 1995, as amended, was reduced by $32.3 million, the
net result of $40.0 million in repayments offset by $7.7 million in borrowings.
The Company has guaranteed the obligations of its borrowing subsidiaries to DnB
under such credit facility.
4
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4. 1996 COMMON STOCK OFFERING --
On July 3, 1996, the Company sold in an underwritten public offering 909,235
shares of its common stock at $43.50 per share (the "1996 Common Stock
Offering"). In conjunction therewith, 842,355 shares of common stock were sold
by certain of the Company's stockholders. The Company received net proceeds of
approximately $37.7 million of which $26.0 million was used to purchase four
vessels acquired from Compagnie Nationale de Navigation, a French corporation
("CNN"), pursuant to the 1996 CNN Transaction (defined below) and to prepay $9.6
million of indebtedness then owed by the Company to CNN, and the remainder of
which has been allocated for general corporate purposes.
5. 1996 CNN TRANSACTION --
On July 3, 1996, pursuant to an agreement entered into by the Company and CNN in
June 1996, the Company consummated a transaction providing for the acquisition
from CNN of six vessels for $22.65 million in cash. At closing, the Company
prepaid $9.6 million aggregate principal amount of the indebtedness outstanding
under promissory notes previously issued to CNN by a subsidiary of the Company.
In addition, CNN converted $4.75 million principal amount of the Company's then
outstanding 2.5% Convertible Subordinated Notes due January 1, 2004 (the "2.5%
Notes") into 156,650 shares of the Company's common stock (in accordance with
the terms of the 2.5% Notes), and subsequently sold all 616,598 shares of the
Company's common stock then owned by it (including the shares of the Company's
common stock received by CNN upon such conversion) in the 1996 Common Stock
Offering.
The Company's common stock issued upon conversion of the 2.5% Notes has been
recorded in stockholders' equity at $3.9 million, the net carrying value of the
2.5% Notes based on the $4.75 million principal amount outstanding on the
conversion date and $0.8 million of related debt discount. The difference
between the $9.6 million paid to extinguish the promissory notes due to CNN and
their $8.4 million net carrying value has been recorded by the Company as an
$0.8 million extraordinary loss ($0.06 per primary share), net of a $0.4 million
income tax benefit.
6. 6.0% NOTE CONVERSION --
On July 12, 1996, following notice from the Company of the redemption on such
date of all $55.25 million principal amount of its then outstanding 6.0%
Convertible Subordinated Notes due July 1, 2003, (the "6.0% Notes"), the holders
thereof converted all of such 6.0% Notes into an aggregate of 2,156,083 shares
of the Company's common stock. The conversion of these shares has been recorded
in stockholders' equity at $53.79 million, the net carrying value of the 6.0%
Notes based on the $55.25 million outstanding principal amount thereof on the
conversion date and $1.46 million related debt issuance costs.
7. CAPITAL COMMITMENTS --
The Company has committed to build nine vessels over the next two years for an
aggregate capital expenditure of approximately $74.25 million and has total
commitments for vessel construction and vessel upgrades of $78.8 million. Of
these amounts, approximately $8.4 million has been funded to date by the
Company. The Company intends to receive approximately $9.4 million from
Transportation Maritima Mexicana ("TMM"), pursuant to a Memorandum of
Understanding dated September 25, 1996 between TMM and the Company, in exchange
for a minority interest in three vessels under construction.
5
<PAGE>
8. SUBSEQUENT EVENTS --
SMIT TRANSACTION
On October 14, 1996, the Company signed a letter of intent (the "SMIT Letter of
Intent") providing for the contemplated acquisition of certain of the offshore
vessel assets and joint venture interests owned by SMIT Internationale N.V. and
its affiliated companies ("SMIT") for a purchase price of (i) approximately
$140.2 million of consideration payable at closing, consisting of $84.0 million
in cash, 712,000 shares of the Company's common stock (which, based on the
closing sale price of the Company's common stock on the Nasdaq Stock Market's
National Market on October 11, 1996, had a value of approximately $35.2 million)
and an amount of the Company's convertible subordinated notes (which the Company
expects will have payment, conversion and other terms substantially similar to
the Notes as defined and described below under the caption "5-3/8% Convertible
Subordinated Notes Offering") having a value of $21.0 million at the time of
issuance and (ii) up to $50.0 million of additional consideration (payable to
SMIT in fiscal 1999 in the form of cash and debt securities of the Company)
determined by and conditioned upon the earnings performance of the assets
acquired from SMIT exceeding certain threshold amounts (the "SMIT Transaction").
Based on vessel ownership and fleet information received from SMIT, which the
Company has not independently verified to date, the Company intends to acquire
from SMIT 14 anchor handling vessels and 12 towing supply vessels, and SMIT's
joint venture interests in 9 anchor handling vessels, 13 towing supply vessels,
and one maintenance vessel.
The SMIT Transaction, which is intended to be consummated on or before December
31, 1996, is subject to the completion of due diligence, the negotiation and
execution of definitive transaction documentation, and the receipt of requisite
foreign and domestic regulatory approvals (including early termination or
expiration of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and compliance
with certain domestic and foreign regulatory procedures). The terms of the SMIT
Transaction are preliminary in nature and there can be no assurance that any
definitive transaction documentation will be entered into or, if entered into,
that the SMIT Transaction will be consummated. If the SMIT Transaction is
consummated, the Company may use up to $84.0 million of the net proceeds from
its recent sale of the Notes to pay the cash consideration in such transaction.
COMMON STOCK LISTING ON NYSE
On October 23, 1996, the Company's common stock commenced trading on the New
York Stock Exchange, Inc. under the trading symbol "CKH." From December 1992
until October 23, 1996, the Company's common stock was traded on the Nasdaq
Stock Market's National Market under the trading symbol "CKOR."
GALAXIE TRANSACTION
On October 24, 1996, the Company signed a letter of intent (the "Galaxie Letter
of Intent") providing for the contemplated acquisition of substantially all the
offshore marine assets, including 24 vessels, owned by Galaxie Marine Services,
Inc., Moonmaid Marine, Inc., Waveland Marine Services, Inc. and Triangle Marine,
Inc. (collectively, "Galaxie"), for approximately $21.0 million, including $18.2
million in cash and 50,000 shares of the Company's common stock (which, based on
the closing price of the Company's common stock on the New York Stock Exchange,
Inc. on October 28, 1996, had a value of approximately $2.8 million) (the
"Galaxie Transaction"). The assets proposed to be acquired include three supply
vessels (including one supply vessel under construction), five crew vessels, 17
utility vessels and other related tangible and intangible assets. In addition,
the Galaxie Letter of Intent contemplates that the Company will lease from
Galaxie, for an initial five-year term following the closing (subject to
renewal), Galaxie's waterfront and warehouse facilities in Patterson,
6
<PAGE>
Louisiana. The acquisition, which is intended to be consummated in January 1997,
is subject to the completion of due diligence, the negotiation and execution of
definitive transaction documentation, and the receipt of requisite regulatory
approvals (including early termination or expiration of the applicable waiting
period under the HSR Act and approvals from the U.S. Maritime Administration).
The terms of the Galaxie Transaction are preliminary in nature and there can be
no assurance that any definitive transaction documentation will be entered into
or, if entered into, that the Galaxie Transaction will be consummated. If the
Galaxie Transaction is consummated, the Company may use up to $18.2 million of
the net proceeds from its recent sale of the Notes to pay the cash consideration
in such transaction.
5-3/8% CONVERTIBLE SUBORDINATED NOTES OFFERING
On November 5, 1996, the Company completed the sale of $172.5 million aggregate
principal amount of its 5-3/8% Convertible Subordinated Notes due November 15,
2006 (the "Notes"). The Notes are convertible, in whole or in part, at the
option of the holder at any time from and after January 5, 1997 and prior to the
close of business on the business day next preceding November 15, 2006, unless
previously redeemed, into shares of the Company's common stock at a conversion
price of $66.00 per share (equivalent to a conversion rate of 15.1515 shares of
the Company's common stock per $1,000 principal amount of Notes), subject to
adjustment in certain circumstances. The Notes are redeemable at the Company's
option at any time from and after November 24, 1999 at the redemption prices
specified therein, together with accrued and unpaid interest to the date of
repurchase. Moreover, if a "Change-in-Control" (as defined in the Indenture for
the Notes) of the Company were to occur, the holder of Notes would be entitled
to require the Company to repurchase its Notes, in whole or in part, at a
purchase price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest through the date of repurchase. No sinking fund is
provided for the Notes; which are general unsecured obligations of the Company,
subordinated in right of payment to all "Senior Indebtedness" (as defined in the
Indenture for the Notes) of the Company and effectively subordinated in right of
payment to all indebtedness of the Company's subsidiaries.
The Notes were sold by the Company to CS First Boston Corporation, Salomon
Brothers Inc and Wasserstein Perella Securities, Inc., as initial purchasers
(the "Initial Purchasers"), in an unregistered private placement conducted
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). The discount to the Initial Purchasers was 2.25% per $100
principal amount of Notes (or an aggregate of approximately $3.88 million). The
Initial Purchasers subsequently resold the Notes in the United States to
"qualified institutional buyers" in reliance on Rule 144A under the Securities
Act and to a limited number of institutional "accredited investors" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), and outside of the
United States in offshore transactions to investors in reliance on Regulation S
under the Securities Act. Approximately $146.88 million principal amount of the
Notes were resold by the Initial Purchasers to qualified institutional buyers in
reliance on Rule 144A, approximately $3.27 million principal amount of the Notes
were resold by the Initial Purchasers to institutional accredited investors, and
approximately $22.35 million principal amount of the Notes were resold by the
Initial Purchasers in offshore transactions to investors in reliance on
Regulation S under the Securities Act.
The net proceeds to the Company from the sale of the Notes to the Initial
Purchasers was approximately $168.3 million (after the deduction of certain
transaction expenses paid by the Company). The Company intends to use such net
proceeds to fund its capital expansion program, including the construction of
new vessels (described above under the caption "Capital Commitments"), and for
general corporate purposes, including acquisitions.
7
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VESSEL ACQUISITION
Subsequent to September 30, 1996, the Company acquired one vessel from CNN for a
purchase price of $2.65 million in cash that was provided from the Company's
existing cash balances. The vessel was acquired pursuant to the terms of an
agreement entered into by the Company and CNN in June 1996, see Note 5.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Prior to the second quarter of 1995, the Company's consolidated operations
consisted exclusively of offshore marine services, whereas its environmental
response services were reported as part of equity in net earnings of 50% or less
owned companies. As a result of the Company's acquisition of the remaining
outstanding common stock of NRC Holdings, Inc. and its subsidiaries that it did
not already own through a merger, management adopted a revised segmented
reporting format for its offshore marine and environmental services operations
to enhance the understanding of the Company's financial condition and results of
operations and to describe more fully management's discussion and analysis of
these matters.
OFFSHORE MARINE SERVICES
The Company provides marine transportation and related services largely
dedicated to supporting offshore oil and gas exploration and production through
the operation, domestically and internationally, of offshore support vessels.
The Company's vessels deliver cargo and personnel to offshore installations, tow
and handle the anchors of drilling rigs and other marine equipment, support
offshore construction and maintenance work, and provide standby safety support.
The Company's vessels are also used for special projects, such as well
stimulation, seismic data gathering, freight hauling, line handling, and oil
spill emergencies.
The Company's operating revenue is affected primarily by average rates per day
worked and utilization. These performance measures are closely aligned with the
offshore oil and gas exploration industry and are a function of demand and
availability of marine vessels. The level of exploration and development of
offshore areas is affected by both short-term and long-term trends in oil and
gas prices which, in turn, are related to the demand for petroleum products and
the current availability of oil and gas resources.
9
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The table below sets forth rates per day worked and utilization data for the
Company during the periods indicated.
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Rates per Day Worked ($): (1)
Supply/Towing Supply.......... 4,748 3,217 4,181 3,040
Anchor Handling Towing Supply. 6,877 5,059 6,182 4,895
Crew(2)....................... 1,722 1,479 1,676 1,488
Standby Safety (3)............ 5,051 4,282 4,758 4,296
Utility/Line Handling(2)...... 1,166 1,132 1,134 1,188
Project and Geophysical/Freight 4,224 3,962 4,185 4,017
Overall Fleet............... 2,638 2,465 2,453 2,527
Overall Utilization (%): (1)
Supply/Towing Supply.......... 94.9 79.8 95.4 78.9
Anchor Handling Towing Supply. 89.8 92.4 92.3 75.1
Crew(2)....................... 96.3 96.4 97.4 96.5
Standby Safety................ 88.9 90.3 86.7 78.5
Utility/Line Handling (2) (4). 84.4 77.6 79.1 80.6
Project and Geophysical/Freight 90.0 88.1 92.5 89.9
Overall Fleet............... 91.1 88.0 89.7 86.5
(1)Rates per day worked and overall utilization figures exclude owned vessels
that are bareboat chartered-out, pooled and joint venture vessels and include
vessels bareboat and time chartered-in by the Company. Rates per day worked
is the ratio of total charter revenue to the total number of vessel days
worked.
(2)Fleet statistics have been restated to give effect to the McCall Acquisition
in May 1996 that was accounted for as a pooling-of-interests.
(3)Revenue for standby safety vessels is earned in pounds sterling and has been
converted to U.S. dollars at the weighted average exchange rate for the
periods indicated. Currency exchange rates have not varied materially between
periods being compared in this table.
(4)At various times during the first nine months of 1996, there were up to 13
of the Company's utility vessels in the U.S. Gulf of Mexico held for sale
that did not operate.
A significant factor affecting operating revenues, other than average rates per
day worked and utilization, is the number of vessels owned and bareboat
chartered-in by the Company. Operating revenues and associated expenses for
vessels bareboat chartered-in and for owned vessels are incurred at similar
rates. However, operating expenses associated with vessels bareboat chartered-in
include bareboat charter hire expenses that, in turn, are included in vessel
expenses, but exclude depreciation expense.
The Company also bareboat charters-out vessels. Operating revenues for these
vessels are lower than for vessels owned and operated or bareboat chartered-in
by the Company, because vessel expenses, normally recovered through charter
revenue, are the responsibility of the charterer. Operating expenses include
depreciation expense if the vessels which are chartered-out are owned. During
the first nine months of 1995, the Company bareboat chartered-out 10 owned
vessels. Nine of the charters were terminated effective October 1, 1995. At
September 30, 1996, there were five vessels operating under bareboat charter-out
arrangements.
10
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The table below sets forth the Company's marine fleet structure at the dates
indicated:
At September 30,
-----------------
1996 1995
-----------------
Owned.............................. 225 245(1)
Bareboat and Time Chartered-In (2). 3 1
Joint Ventured (3)................. 10 9
Pooled (4)......................... 5 16
-----------------
Overall Fleet................. 243 271
=================
_____________
(1)Fleet statistics have been restated to give effect to the McCall Acquisition
in May 1996 that was accounted for as a pooling-of-interests.
(2)A bareboat charter is a lease under which the entity chartering-in a vessel
is responsible for all crewing, insurance and operating expenses, as well as
the payment of bareboat charter hire to the vessel owner. A time charter is a
lease of a vessel under which the entity providing the vessel is responsible
for all crewing, insurance and operating expenses. Except for two vessels
time chartered-in at September 30, 1996, all other vessels are bareboat
chartered.
(3)In 1996 and 1995, nine vessels were owned by the Company's joint venture in
Mexico. In 1996, the Company's joint venture in Mexico also operated a vessel
under a long term lease with the Company.
(4)In 1996 and 1995, five vessels owned by Toisa Ltd. participated in a pool of
North Sea standby safety vessels with the Company. In 1995, 11 additional
vessels owned by CNN participated in another pool with the Company. The pool
with CNN was terminated effective October 1, 1995.
Vessel operating expenses are primarily a function of fleet size and utilization
levels. The most significant vessel operating expense items are wages paid to
marine personnel, maintenance and repairs, and marine insurance. In addition to
variable vessel operating expenses, the offshore marine segment also incurs
fixed charges related to the depreciation of property and equipment.
Depreciation is a significant operating cost, and the amount related to vessels
is the most significant component.
Although substantially all of the Company's revenues and expenses are in U.S.
dollars, some of the Company's revenues and expenses are paid in foreign
currencies. For financial statement reporting purposes, these amounts are
translated into U.S. dollars at the weighted average exchange rates during the
relevant period. The foregoing applies primarily to the Company's North Sea
operations and to a lesser extent its West African and Mexican offshore marine
operations. Overall, the percentage of the Company's offshore marine revenues
derived from foreign operations whether in U.S. dollars or foreign currencies
was approximately 30% and 32% in the nine months ended September 30, 1996 and
1995, respectively.
Regulatory drydockings, which are a substantial component of marine maintenance
and repair costs, are expensed when incurred. Under applicable maritime
regulations, vessels must be drydocked twice in a five-year period for
inspection and routine maintenance and repair. The Company follows an asset
management strategy pursuant to which it defers required drydocking of selected
marine vessels and voluntarily removes these marine vessels from operation
during periods of weak market conditions and low rates per day worked. Should
the Company undertake a large number of drydockings in a particular fiscal
quarter or put through survey a disproportionate number of older vessels which
typically have higher drydocking costs, comparative results may be affected. In
the nine months ended September 30, 1996, the Company completed the drydocking
of 86 vessels at an aggregate cost of $6.0 million versus 32 vessels drydocked
at an aggregate cost of $2.3 million in the comparable period of 1995. Drydock
activity in 1995 reflects a low number of vessels repaired in direct response to
weak market conditions and low day rates in the U.S. Gulf of Mexico. The
Company's results in 1996 reflect (i) the growth of the fleet, particularly in
crew and utility vessels which have lower drydocking costs than larger vessels,
(ii) the return to a normalized drydocking schedule, and (iii) the effect of
repairing older vessels.
Operating results are also affected by the Company's participation in the
following ventures: (i) the SEAFISH Pool, terminated effective October 1, 1995,
whereby operating revenues and expenses for certain vessels were pooled and the
net pool results were shared equally by the
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Company and CNN after certain preference payments and (ii) a pooling agreement
with Toisa Ltd. to coordinate the marketing of both companies' vessels in the
North Sea standby safety market. Additionally, the Company has an equity
interest in the results of a joint venture in Mexico which operated ten vessels
at September 30, 1996. On September 15, 1995, the Company completed the
acquisition of assets from John E. Graham & Sons and certain of its affiliated
companies ("Graham") which included 127 vessels used to support the offshore oil
and gas exploration and production industry in the U.S. Gulf of Mexico and
certain real estate, capital equipment and inventory associated with the
operation of these vessels. The acquisition was financed with $74.0 million of
borrowings under a revolving credit loan facility with Den norske Bank A/S (the
"DnB Facility"). Of the $74.0 million borrowed, $72.9 million was paid to Graham
to acquire the purchased assets, and the balance was used to defray $1.2 million
in debt issue and acquisition costs. Acquisition costs have been allocated to
vessels acquired and accordingly reported in Property and Equipment. Debt issue
costs have been included in Other Assets in the consolidated balance sheet of
the Company and will be amortized to interest expense over the life of the
related borrowings.
In 1995, the Company acquired three towing supply vessels two anchor handling
vessels and certain other assets for an aggregate consideration of $21.55
million ($11.3 million of which was paid by issuing 459,948 shares of the
Company's common stock to CNN and $10.25 million of which was paid in cash). The
parties also terminated their existing pooling arrangement and agreed to manage
the formerly pooled vessels through Feronia International Shipping S.A., a
French corporation ("FISH"), in which the Company and CNN each own a 50%
interest.
On May 31, 1996, the Company acquired McCall Enterprises, Inc. and its
affiliated companies (collectively, the "McCall Companies") which, at the date
of acquisition operated 36 crew boats and five utility boats dedicated to
serving the oil and gas industry primarily in the U.S. Gulf of Mexico. Such
acquisition (the "McCall Acquisition"), was accomplished pursuant to a series of
merger and share exchange agreements involving the Company and certain of its
subsidiaries, the McCall Companies and the former stockholders of the McCall
Companies. In consideration for the McCall Acquisition, on August 9, 1996, the
Company issued an aggregate of 1,306,550 shares of its common stock to the
former stockholders of the McCall Companies. The McCall Acquisition has been
accounted for as a pooling-of-interests. The financial statements included
herein are based upon the assumption that the companies were combined for the
nine-months ended September 30, 1996, and the financial statements and operating
statistics of the prior year have been restated to give effect to the business
combination.
On July 3, 1996, pursuant to an agreement entered into by the Company and CNN in
June 1996 (the "1996 CNN Agreement"), the Company consummated a transaction
providing for the acquisition from CNN of six vessels for $22.65 million in cash
(the "1996 CNN Transaction"). In addition, pursuant to the 1996 CNN Agreement,
CNN converted $4.75 million principal amount of the then outstanding 2.5%
Convertible Subordinated Notes due January 1, 2004 (the "2.5% Notes") owned by
it into 156,650 shares of the Company's common stock pursuant to the terms of
such notes. The Company has also prepaid certain promissory notes owed CNN at
face value of $9.6 million and included in its July 1996 underwritten public
offering shares of the Company's common stock previously owned by CNN. See
"Liquidity and Capital Resources."
ENVIRONMENTAL SERVICES
The Company's environmental services business, operated primarily through a
wholly owned subsidiary, National Response Corporation ("NRC"), provides
contractual oil spill response services to those who store, transport, produce
or handle petroleum and certain other non-
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petroleum oils as required by the Oil Pollution Act of 1990 ("OPA 90"). NRC's
clients include tank vessel owner/operators, refiners and terminal operators,
exploration and production facility operators, and pipeline operators. NRC
charges a retainer fee to its customers for ensuring, by contract, the
availability at predetermined rates to NRC's response services. Retainer
services include employing a staff to supervise response to an oil spill
emergency and maintaining specialized equipment, including marine equipment, in
a ready state for spill response as contemplated by response plans filed by
NRC's customers in accordance with OPA 90 and various state regulations. NRC
also maintains relationships with numerous environmental sub-contractors to
assist with equipment maintenance and provide trained personnel for deploying
equipment in a spill response.
Pursuant to retainer agreements entered into with NRC, certain vessel owners pay
in advance to NRC a minimum annual retainer fee based upon the number and size
of vessels in each such owner's fleet and in some circumstances pay NRC
additional fees based upon the level of each vessel owner's voyage activity in
the U.S. The Company recognizes the greater of revenue earned by voyage activity
or the portion of the retainer earned in each accounting period. Certain other
vessel owners pay a fixed fee for NRC's retainer services and such fee is
recognized ratably throughout the year. Facility owners generally pay a
quarterly fee to NRC based on a formula that defines and measures petroleum
products transported to or processed at the facility. Some facility owners pay
an annual fixed fee and such fee is recognized ratably throughout the year.
NRC's retainer agreements with vessel owners generally range from one to three
years while retainer arrangements with facility owners are as long as seven
years.
Spill response revenue is dependent on the magnitude of any one spill response
and the number of spill responses within a given fiscal period. Consequently,
spill response revenue can vary greatly between comparable periods and the
revenue from any one period is not indicative of a trend or of anticipated
results in future periods. Costs of oil spill response activities relate
primarily to (i) payments to sub-contractors for labor, equipment, and
materials, (ii) direct charges to NRC for labor, equipment and materials, and
(iii) training and exercises related to spill response preparedness.
The principal components of NRC's operating costs are salaries and related
benefits for operating personnel, payments to sub-contractors, equipment
maintenance and depreciation. These expenses are primarily a function of
regulatory requirements and the level of retainer business.
On March 14, 1995, the Company acquired the remaining 57.1% of the outstanding
common stock of NRC Holdings, Inc. that it did not already own through a merger
of NRC Holdings, Inc. into CRN Holdings, Inc. ("CRN"), a wholly owned subsidiary
of the Company (the "NRC Merger"). From March 14, 1995, the financial condition,
results of operations and cash flows of CRN are reflected in the Company's
consolidated financial statements. Prior to March 14, 1995, the Company reported
its 42.9% equity interest in NRC Holdings, Inc. as an investment in a 50% or
less owned company that was accounted for by the equity method. Each share of
common stock of NRC Holdings, Inc. (other than treasury shares and shares held
by CRN) outstanding immediately prior to the effective time of the NRC Merger
was converted into 2,203.7474 shares of the Company's common stock. Accordingly,
an aggregate of 292,965 shares of the Company's common stock (having a value of
approximately $5.7 million at the time of issuance) were issued to the former
stockholders of NRC Holdings, Inc.
On October 27, 1995, the Company and the National Response Corporation ("NRC"),
a wholly owned subsidiary of CRN, amended certain existing agreements with
Coastal Refining &
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Marketing, Inc. ("Coastal") and Phibro Energy USA, Inc. ("Phibro"). Those
amendments reduced Coastal's and Phibro's participation interest in certain
operating results of NRC, reduced their retainer fees payable to NRC and
eliminated certain options held by each of them to purchase up to 20% of the
fully diluted common stock of NRC. In addition, the agreements with Coastal were
modified to (i) extend Coastal's service agreement with NRC for an additional
three years, (ii) provide for the issuance to Coastal of 311,357 shares of the
Company's common stock (having a value of $7.5 million at time of issuance) and,
(iii) obtain Coastal's agreement not to acquire more than 5.0% of the
outstanding common stock of the Company.
RESULTS OF OPERATIONS
The following table sets forth operating revenue and operating profit by
business segment for the periods indicated, in thousands. The offshore marine
business segment's data is provided by geographic area of operation. The
environmental business segment's principal operations are in the United States.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ -----------------------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Operating Revenue --
Marine:
United States $ 34,553 $ 16,524 $ 96,299 $ 44,735
North Sea 3,807 3,622 10,643 9,928
West Africa 9,888 3,089 26,759 8,155
Other Foreign (1) 2,059 1,133 4,342 3,139
-------------- -------------- -------------- --------------
50,307 24,368 138,043 65,957
Environmental 7,238 11,658 22,250 16,088
-------------- -------------- -------------- --------------
57,545 36,026 160,293 82,045
============== ============== ============== ==============
Operating Profit --
Marine:
United States 11,844 2,527 30,437 8,675
North Sea (67) (704) (1,745) (2,431)
West Africa 2,145 752 6,083 2,560
Other Foreign(1) 1,160 503 2,085 1,332
-------------- -------------- -------------- --------------
15,082 3,078 36,860 10,136
Environmental 835 853 3,183 1,407
-------------- -------------- -------------- --------------
15,917 3,931 40,043 11,543
Other income (expense)(2) (36) 10 (515) 248
General corporate administration (874) (587) (2,255) (1,516)
Net interest (expense) income 134 (981) (2,276) (2,361)
Minority interest in loss of a subsidiary 29 81 176 250
Equity in net earnings of 50% or less owned companies 325 246 766 746
Income tax expense (5,240) (863) (12,445) (2,852)
-------------- -------------- -------------- --------------
Income before extraordinary item $ 10,255 $ 1,837 $ 23,494 $ 6,058
============== ============== ============== ==============
</TABLE>
(1) Other foreign locations where the Company conducts business are Mexico, the
Arabian Gulf and Australia.
(2) Excludes gain/(loss) from equipment sales and retirements and certain other
expenses that were reclassified to operating profit of the applicable
geographical area of operation.
COMPARISON OF THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1996 TO THE
THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995
The marine business segment's operating revenue increased $25.9 million and
$72.1 million in the three and nine-month periods ended September 30, 1996,
respectively, compared to the three and nine-month periods ended September 30,
1995 due primarily to an increase in the number of owned vessels, higher rates
per day worked and utilization, and the termination of bareboat charter-out
arrangements for nine Company owned vessels. During the third and
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fourth quarters of 1995 and the third quarter of 1996, the Company acquired 137
offshore vessels that substantially increased its fleet size, primarily in the
U.S. Gulf of Mexico and West Africa. These acquired vessels (including 83
utility, 37 crew, seven supply, five anchor handling towing supply, four towing
supply, and one standby safety) and three additional chartered-in vessels
accounted for approximately $17.3 million or 67% and $48.4 million or 67% of the
increase in operating revenue between comparable three and nine-month periods,
respectively. The increase in the Company's rates per day worked and vessel
utilization accounted for an additional $5.1 million or 20% and $15.1 million or
21% of the increase in operating revenue between comparable three and nine-month
periods, respectively, due primarily to improved market conditions in the U.S.
Gulf of Mexico and North Sea. The remaining increase in revenue between
comparable three and nine-month periods was due primarily to the Company's
termination of bareboat charter-out arrangements in the fourth quarter of 1995
for nine Company owned vessels operating in West Africa.
The environmental business segment's operating revenue decreased $4.4 million in
the three-month period ended September 30, 1996 compared to the three-month
period ended September 30, 1995 due primarily to a decline in oil spill response
revenue. Operating revenue increased $6.2 million between comparable nine-month
periods due primarily to the consolidation of the financial results of the
environmental subsidiaries and higher oil spill response, retainer, and voyage
revenue. The Company's environmental subsidiaries became wholly owned on March
14, 1995; whereas, prior to that date, they were reported in the financial
statements under the equity method of accounting.
The marine business segment's operating profit increased $12.0 million and $26.7
million in the three and nine-month periods ended September 30, 1996,
respectively, compared to the three and nine-month periods ended September 30,
1995. The increases were due primarily to the factors affecting operating
revenue as outlined above; however, operating and administrative expenses also
increased. Operating expenses increased primarily due to an increase in (i) the
number of vessels drydocked and repaired in the U.S. and foreign regions,
particularly the North Sea, (ii) crew wage and related benefit costs in the
U.S., and (iii) engine repairs aboard vessels operating in the North Sea and
offshore West Africa. Administrative expenses increased primarily due to an
increase in (i) wage and related benefit costs, (ii) bad debt provisions for
trade accounts receivable, (iii) cost resulting from the consolidation of
certain U.S. operations, and (iv) commitment fees paid a bank under a revolving
credit loan facility established in late 1995. Gains from the sale of vessels
declined as the Company sold less valuable equipment in the current year. In the
U.S. during 1995, three supply vessels were sold; whereas, during 1996, eleven
utility vessels were sold.
The environmental business segment's operating profit increased $1.8 million in
the nine-month period ended September 30, 1996 compared to the nine-month period
ended September 30, 1995 due primarily to the consolidation of the financial
results of the environmental subsidiaries and an increase in retainer and voyage
revenue.
In the nine-month period ended September 30, 1996, other expense included $0.5
million of costs to complete the McCall Acquisition. In the nine-month period
ended September 30, 1995, other income related primarily to a $0.2 million gain
recognized in conjunction with the purchase of $2.3 million principal amount of
the Company's then outstanding 6% Convertible Subordinated Notes due 2003 ("6%
Notes"). The gain represented the difference between the amount paid to acquire
the 6% Notes and their carrying amount, after giving effect to a write-off of
certain unamortized deferred financing costs associated with the original sale
of such securities.
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<PAGE>
Overall administrative and general expenses, relating primarily to operating
activities but including corporate expenses, increased $2.2 million and $8.6
million in the three and nine-month periods ended September 30, 1996,
respectively, compared to the three and nine-month periods ended September 30,
1995. The marine business segment increased $2.3 million and $7.2 million
between comparable three and nine-month periods, respectively, and related
primarily to an increase in managerial staff and other administrative costs
necessary to support fleet growth and other factors as mentioned in the
discussion above of the marine business segment's operating profit. Corporate
administrative and general expenses increased $0.3 million and $0.7 million
between comparable three and nine-month periods, respectively, due primarily to
greater salary expense. The environmental business segment's administrative
costs increased between comparable nine-month periods due primarily to the
consolidation of the financial results of the environmental subsidiaries. The
Company's administrative and general expenses primarily include costs associated
with personnel, professional services, travel, communications, facility rental
and maintenance, general insurance, and franchise taxes.
Overall depreciation and amortization expense, which related primarily to
operating activities, increased $1.6 million and $5.0 million in the three and
nine-month periods ended September 30, 1996, respectively, compared to the three
and nine-month periods ended September 30, 1995. The marine business segment
accounted for $1.6 million and $4.2 million of the increase between comparable
three and nine-month periods, respectively, and related primarily to fleet
growth. The remainder of the increase between comparable nine-month periods was
due primarily to the consolidation of the financial results of the environmental
subsidiaries.
Net interest expense decreased $1.1 million and $0.1 million in the three and
nine-month periods ended September 30, 1996, respectively, compared to the three
and nine-month periods ended September 30, 1995. Interest expense decreased due
primarily to a decrease in outstanding indebtedness that was caused primarily by
the conversion in July 1996 of the Company's then outstanding 2.5% Notes and
6% Notes into shares of the Company's common stock. This decrease was
partially offset by additional interest expense on borrowings under the DnB
Facility. Interest income increased between comparable quarters due primarily to
increased invested cash balances resulting from improved operating results.
In the three and nine-month periods ended September 30, 1996, equity in the
earnings of 50% or less owned companies, net of applicable income taxes,
resulted from the Company's investment in a Mexican joint venture and a recently
organized joint venture which provides environmental services on the West Coast
of the United States. In the comparable periods of 1995, equity earnings were
realized exclusively from the Company's participation in the Mexican joint
venture. Operations in Mexico have declined between comparable periods due to
weaker market conditions.
LIQUIDITY AND CAPITAL RESOURCES
The Company's on-going liquidity requirements arise primarily from its need to
service debt, fund working capital requirements, acquire or improve equipment,
and make other investments. Management believes that cash flow from operations,
together with net proceeds from the recent sale of its 5-3/8% Convertible
Subordinated Notes due November 15, 2006 (the "Notes"), will provide sufficient
funds to satisfy the Company's working capital requirements. In addition, the
Company may, from time to time, issue shares of common stock, debt, or a
combination thereof to finance the acquisition of equipment and businesses or
improvements to existing equipment.
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<PAGE>
The Company's cash flow levels and operating revenues are determined primarily
by vessels' rates per day worked, overall vessel utilization, the size of the
Company's fleet, and the level of oil spill response activity. Factors relating
to the marine business segment are affected directly by the volatility of oil
and gas prices, the level of offshore drilling and exploration activity, and
other factors beyond the Company's control.
Certain of the Company's subsidiaries, Arthur Levy Enterprises, Inc., Graham
Offshore Inc. and SEACOR Offshore Inc. are parties (the "Borrowing
Subsidiaries") to the DnB Facility dated September 15, 1996, as amended. The
Company has guaranteed the obligations of the Borrowing Subsidiaries to DnB
under the DnB Facility. At September 30, 1996, $7.8 million principal amount of
borrowings was outstanding under the DnB Facility and $77.2 million was
available for future borrowing. Such borrowings were used to finance the
acquisition of certain offshore marine service vessels and other related assets,
to pay certain transaction financing and acquisition costs and to fund working
capital requirements in respect of such acquired vessels, all in connection with
the Graham acquisition.
Pursuant to the DnB Facility, the Borrowing Subsidiaries may borrow up to $85.0
million aggregate principal amount (the "Maximum Committed Amount") of senior
secured revolving bridge loans any time prior to January 31, 1997 (the "Initial
Term"). At the Company's election, such loans, on or prior to January 31, 1997,
may be converted into senior secured reducing revolving credit loans maturing on
January 31, 2004.
During the Initial Term, outstanding borrowings bear interest at an annual rate
equal to 125 basis points above LIBOR (i.e., approximately 7.4% per annum at
November 11, 1996). If the Borrowing Subsidiaries elect to convert the senior
secured bridge loans to senior secured reducing revolving credit loans (the
"Term Loans"), the Maximum Committed Amount automatically will decrease
semiannually by certain percentages described in the DnB Facility. The DnB
Facility requires the Company, on a consolidated basis, to maintain a minimum
ratio of indebtedness to vessel value, as defined, a minimum cash and cash
equivalent level and a specified debt service coverage ratio. Furthermore, the
Company is prohibited through January 31, 1997 from paying cash dividends in
respect of its common stock, without the prior written consent of DnB. The
Company also is prohibited from incurring additional indebtedness above a
certain level without DnB's consent. Pursuant to the DnB Facility, the Term
Loans would bear interest at an annual rate equal to a maximum of 150 basis
points above LIBOR.
Borrowings outstanding pursuant to the DnB Facility are secured by first
preferred mortgages on vessels owned by the Borrowing Subsidiaries, a negative
pledge relating to certain vessels and an assignment of earnings and certain
contract rights with respect to vessels owned and operated by the Borrowing
Subsidiaries. If the Borrowing Subsidiaries exercise the aforementioned
conversion election, certain additional subsidiaries of the Company will be
required to guaranty the obligations of the Borrowing Subsidiaries under the DnB
Facility and provide mortgages on additional vessels to secure such guaranty.
On July 3, 1996, the Company sold in an underwritten public offering 909,235
shares of its common stock at $43.50 per share (the "1996 Common Stock
Offering"). In conjunction therewith, 842,355 shares of common stock were sold
by certain of the Company's stockholders. The Company received net proceeds of
approximately $37.7 million of which $26.0 million was used to purchase four
vessels acquired CNN, pursuant to the 1996 CNN Transaction and to prepay $9.6
million of indebtedness then owed by the Company to CNN, and the remainder of
which has been allocated for general corporate purposes.
17
<PAGE>
On July 3, 1996, the Company consummated the 1996 CNN Transaction providing for
the acquisition from CNN of six vessels for $22.65 million in cash. At closing,
the Company prepaid $9.6 million aggregate principal amount of the indebtedness
outstanding under promissory notes previously issued to CNN by a subsidiary of
the Company. In addition, CNN converted $4.75 million principal amount of the
Company's then outstanding 2.5% Notes into 156,650 shares of the Company's
common stock (in accordance with the terms of the 2.5% Notes), and subsequently
sold all 616,598 shares of the Company's common stock then owned by it
(including the shares of the Company's common stock received by CNN upon such
conversion) in the 1996 Common Stock Offering.
On July 12, 1996, following notice from the Company of the redemption on such
date of all $55.25 million principal amount of its then outstanding 6.0% Notes,
the holders thereof converted all of such 6.0% Notes into an aggregate of
2,156,083 shares of the Company's common stock (the "6.0% Note Conversion").
Net cash provided by operating activities increased $35.1 million in the
nine-month period ended September 30, 1996, compared to the nine-month period
ended September 30, 1995. The increase was due primarily to an increase in the
marine business segment's direct vessel contribution (defined as operating
revenues net of direct vessel operating expenses) and the consolidation of the
financial results of the environmental subsidiaries. Direct vessel contribution
rose due primarily to a net increase in the number of owned or chartered-in
vessels, improved rates per day worked and utilization, and the termination of
bareboat charters for owned vessels.
Net cash used in investing activities decreased $35.6 million in the nine-month
period ended September 30, 1996, compared to the nine-month period ended
September 30, 1995. Capital expenditures for property and equipment declined
between comparable periods. In 1995, the Company acquired substantially all the
assets of Graham which included 127 marine vessels. In 1996, capital
expenditures related primarily to the (i) the new construction of two crew and
three anchor handling towing supply vessels, (ii) the acquisition of five
vessels from CNN, (iii) improvements made to certain project, supply, utility,
and anchor handling towing supply vessels, and (iv) the purchase of oil spill
response equipment. Proceeds from the sale of vessels declined between
comparable periods as vessels with lower market values were sold in 1996
compared to 1995. Further, cash acquired in a business combination did not recur
between comparable periods.
In 1995, net cash provided by financing activities totaled $53.2 million.
Proceeds received from the issuance of long-term debt in connection with the
Graham acquisition were offset by the Company's repayment of principal balances
due CIBC Inc. by an environmental subsidiary. In 1996, net cash of $6.9 million
was used in financing activities. Pursuant to the 1996 Common Stock Offering,
the Company received net proceeds of $37.7 million of which $26.0 million was
used to acquire vessels from and repay indebtedness to CNN. Indebtedness under
the DnB Facility was reduced by $32.3 million, the net results of $40 million in
repayments offset by $7.7 million in borrowings, and other notes were repaid as
scheduled.
On October 14, 1996, the Company signed a letter of intent (the "SMIT Letter of
Intent") providing for the contemplated acquisition of certain of the offshore
vessel assets and joint venture interests owned by SMIT Internationale N.V. and
its affiliated companies ("SMIT") for a purchase price of (i) approximately
$140.2 million of consideration payable at closing, consisting of $84.0 million
in cash, 712,000 shares of the Company's common stock (which, based on the
closing sale price of the Company's common stock on the Nasdaq Stock Market's
National
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<PAGE>
Market on October 11, 1996, had a value of approximately $35.2 million) and an
amount of the Company's convertible subordinated notes (which the Company
expects will have payment, conversion and other terms substantially similar to
the Notes) having a value of $21.0 million at the time of issuance and (ii) up
to $50.0 million of additional consideration (payable to SMIT in fiscal 1999 in
the form of cash and debt securities of the Company) determined by and
conditioned upon the earnings performance of the assets acquired from SMIT
exceeding certain threshold amounts (the "SMIT Transaction").
The SMIT Transaction, which is intended to be consummated on or before December
31, 1996, is subject to the completion of due diligence, the negotiation and
execution of definitive transaction documentation, and the receipt of requisite
foreign and domestic regulatory approvals (including early termination or
expiration of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and compliance
with certain domestic and foreign regulatory procedures). The terms of the SMIT
Transaction are preliminary in nature and there can be no assurance that any
definitive transaction documentation will be entered into or, if entered into,
that the SMIT Transaction will be consummated. If the SMIT Transaction is
consummated, the Company may use up to $84.0 million of the net proceeds from
its recent sale of the Notes to pay the cash consideration in such transaction.
On October 24, 1996, the Company signed a letter of intent (the "Galaxie Letter
of Intent") providing for the contemplated acquisition of substantially all the
offshore marine assets, including 24 vessels, owned by Galaxie Marine Services,
Inc., Moonmaid Marine, Inc., Waveland Marine Services, Inc. and Triangle Marine,
Inc. (collectively, "Galaxie"), for approximately $21.0 million, including $18.2
million in cash and 50,000 shares of the Company's common stock (which, based on
the closing price of the Company's common stock on the New York Stock Exchange,
Inc. on October 28, 1996, had a value of approximately $2.8 million) (the
"Galaxie Transaction"). The assets proposed to be acquired include three supply
vessels (including one supply vessel under construction), five crew vessels, 17
utility vessels and other related tangible and intangible assets. In addition,
the Galaxie Letter of Intent contemplates that the Company will lease from
Galaxie, for an initial five-year term following the closing (subject to
renewal), Galaxie's waterfront and warehouse facilities in Patterson, Louisiana.
The acquisition, which is intended to be consummated in January 1997, is subject
to the completion of due diligence, the negotiation and execution of definitive
transaction documentation, and the receipt of requisite regulatory approvals
(including early termination or expiration of the applicable waiting period
under the HSR Act and approvals from the U.S. Maritime Administration). The
terms of the Galaxie Transaction are preliminary in nature and there can be no
assurance that any definitive transaction documentation will be entered into or,
if entered into, that the Galaxie Transaction will be consummated. If the
Galaxie Transaction is consummated, the Company may use up to $18.2 million of
the net proceeds from its recent sale of the Notes to pay the cash consideration
in such transaction.
On November 5, 1996, the Company completed the sale of $172.5 million aggregate
principal amount of the Notes. The net proceeds to the Company from the sale of
the Notes to the Initial Purchasers was approximately $168.3 million (after the
deduction of certain transaction expenses paid by the Company). The Company
intends to use such net proceeds to fund its capital expansion program,
including the construction of new vessels, and for general corporate purposes,
including acquisitions.
CAPITAL EXPENDITURES
The Company may make selective acquisitions of marine vessels or fleets of
marine vessels and oil spill response equipment and/or expand the scope and
nature of its environmental services. The Company also may upgrade or enhance
its marine vessels to remain competitive in the marketplace. The Company has
committed to build nine vessels over the next two years for an aggregate capital
expenditure of approximately $74.25 million and has total commitments
19
<PAGE>
for vessel construction and vessel upgrades of $78.8 million. Of these amounts,
approximately $8.4 million has been funded to date by the Company. The Company
intends to receive approximately $9.4 million from Transportation Maritima
Mexicana ("TMM"), pursuant to a Memorandum of Understanding dated September 25,
1996 between TMM and the Company, in exchange for a minority interest in three
vessels under construction. Management anticipates that capital expenditures
would be funded through a combination of cash flow provided by operations,
existing cash balances, and potentially through the issuance of additional
shares of common stock or additional indebtedness.
Expenditures for environmental compliance to modify marine segment vessels have
not been a significant component of the Company's capital budget.
NEW ACCOUNTING STANDARD
In January 1996, the Company adopted Statement of Financial Accounting Standards
No. 121 - "Accounting for Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" which has not had a material effect on the Company's
financial statements taken as a whole.
Also in 1995, Statement of Financial Accounting Standard No. 123 - "Accounting
for Stock- Based Compensation" (the "Statement") was issued which established,
among other things, financial accounting and reporting standards for stock-based
employee compensation plans. Entities may either adopt a "fair value based
method" of accounting for an employee stock option as defined by the Statement
or may continue to use accounting methods as prescribed by APB Opinion No. 25
"Accounting for Stock Issued to Employees." Entities electing to comply with the
guidelines prescribed by APB Opinion No. 25 are required to make pro forma
disclosures of net income and earnings per share as if the fair value based
method of accounting defined in the Statement had been applied. The accounting
requirements of the Statement are effective for transactions entered into in
fiscal years that begin after December 15, 1995. The Company has continued to
follow APB Opinion No. 25 and expects to make appropriate disclosures in
accordance with Statement No. 123.
20
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities
(c) On November 5, 1996, the Company completed the sale of $172.5
million aggregate principal amount of the Notes. The Notes are
convertible, in whole or in part, at the option of the holder at
any time from and after January 5, 1997 and prior to the close of
business on the business day next preceding November 15, 2006,
unless previously redeemed, into shares of the Company's common
stock at a conversion price of $66.00 per share (equivalent to a
conversion rate of 15.1515 shares of Company's common stock per
$1,000 principal amount of Notes), subject to adjustment in
certain circumstances. The Notes are redeemable at the Company's
option at any time from and after November 24, 1999 at the
redemption prices specified therein, together with accrued and
unpaid interest to the date of repurchase. Moreover, if a
"Change-in-Control" (as defined in the Indenture for the Notes)
of the Company were to occur, the holder of Notes would be
entitled to require the Company to repurchase its Notes, in whole
or in part, at a purchase price equal to 100% of the principal
amount thereof, together with accrued and unpaid interest through
the date of repurchase. No sinking fund is provided for the
Notes; which are general unsecured obligations of the Company,
subordinated in right of payment to all "Senior Indebtedness" (as
defined in the Indenture for the Notes) of the Company and
effectively subordinated in right of payment to all indebtedness
of the Company's subsidiaries.
The Notes were sold by the Company to CS First Boston
Corporation, Salomon Brothers Inc and Wasserstein Perella
Securities, Inc., as initial purchasers (the "Initial
Purchasers"), in an unregistered private placement conducted
pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"). The discount to the Initial
Purchasers was 2.25% per $100 principal amount of Notes (or an
aggregate of $3.88 million). The Initial Purchasers subsequently
resold the Notes in the United States to "qualified institutional
buyers" in reliance on Rule 144A under the Securities Act and to
a limited number of institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), and outside of the United States in offshore transactions
to investors in reliance on Regulation S under the Securities
Act. Approximately $146.88 million principal amount of the Notes
were resold by the Initial Purchasers to qualified institutional
buyers in reliance on Rule 144A, approximately $3.27 million
principal amount of the Notes were resold by the Initial
Purchasers to institutional accredited investors, and
approximately $22.35 million principal amount of the Notes were
resold by the Initial Purchasers in offshore transactions to
investors in reliance on Regulation S under the Securities Act.
The net proceeds to the Company from the sale of the Notes to the
Initial Purchasers was approximately $168.3 million (after the
deduction of certain transaction expenses paid by the Company).
The Company intends to use such net proceeds to fund its capital
expansion program, including the
21
<PAGE>
construction of new vessels (see, "Management's Discussion and
Analysis of Financial Condition and Results of Operation -
Capital Expenditures" in Item 2 Part I of this Report on Form
10-Q), and for the general corporate purposes, including
acquisitions.
Item 5. Other Information
Information about the Company that would otherwise be required to
be disclosed in a Current Report on Form 8-K pursuant to Item 9.
"Sales of Equity Securities Pursuant to Regulation S" is made in
Item 2(c). "Changes in Securities" of Part II of this Report on
Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.0 Restated Certificate of Incorporation of SEACOR Holdings, Inc.
(incorporated herein by reference to Exhibit 3.1 to SEACOR
Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1992).
3.1 Amended and Restated By-Laws of SEACOR Holdings, Inc.
(incorporated by reference to Exhibit 4.2 of the SEACOR Holdings,
Inc. Registration Statement on Form S-8 filed on September 25,
1996).
4.0 Indenture dated as of November 1, 1996, between First Trust
National Association, as trustee, and SEACOR Holdings, Inc.
(including therein forms of 5-3/8% Convertible Subordinated Notes
due November 15, 2006 of SEACOR Holdings, Inc.)
4.1 Registration Rights Agreement dated November 5, 1996, between
SEACOR Holdings, Inc. and CS First Boston Corporation, Salomon
Brothers Inc and Wasserstein Perella Securities, Inc.
11.0 Computation of Per Share Earnings for the Three and Nine-Months
Ended September 30,1996 and 1995.
27.0 Financial Data Schedule.
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K during
the quarter ended September 30, 1996.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEACOR HOLDINGS, INC.
(Registrant)
DATE: NOVEMBER 14, 1996 By: /s/ Charles Fabrikant
----------------------
Charles Fabrikant, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
DATE: NOVEMBER 14, 1996 By: /s/ Randall Blank
------------------
Randall Blank, Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial Officer)
23
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.0 Restated Certificate of Incorporation of SEACOR Holdings, Inc.
(incorporated herein by reference to Exhibit 3.1 to SEACOR
Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1992).
3.1 Amended and Restated By-Laws of SEACOR Holdings, Inc.
(incorporated by reference to Exhibit 4.2 of the SEACOR Holdings,
Inc. Registration Statement on Form S-8 filed on September 25,
1996).
4.0 Indenture dated as of November 1, 1996, between First Trust
National Association, as trustee, and SEACOR Holdings, Inc.
(including therein forms of 5-3/8% Convertible Subordinated Notes
due November 15, 2006 of SEACOR Holdings, Inc.)
4.1 Registration Rights Agreement dated November 5, 1996, between
SEACOR Holdings, Inc. and CS First Boston Corporation, Salomon
Brothers Inc and Wasserstein Perella Securities, Inc.
11.0 Computation of Per Share Earnings for the Three and Nine-Months
Ended September 30,1996 and 1995.
27.0 Financial Data Schedule.
================================================================================
INDENTURE
SEACOR HOLDINGS, INC.
to
FIRST TRUST NATIONAL ASSOCIATION, Trustee
$200,000,000
5 3/8% Convertible Subordinated Notes Due November 15, 2006
Dated as of November 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
Parties........................................................... 1
Recitals of the Company........................................... 1
ARTICLE I
Definitions and Other Provisions of
-----------------------------------
General Application
-------------------
SECTION 1.01. Definitions:
Act............................................. 2
Affiliate; control.............................. 2
Agent Members................................... 3
Applicable Procedures........................... 3
Authenticating Agent............................ 3
Board of Directors.............................. 3
Board Resolution................................ 3
Business Day.................................... 3
CEDEL........................................... 3
Closing Price................................... 3
Commencement Date............................... 4
Commission...................................... 4
Common Stock.................................... 4
Company......................................... 4
Company Request; Company Order.................. 5
Corporate Trust Agency............................ 5
Corporate Trust Office.......................... 5
corporation..................................... 5
Defaulted Interest.............................. 5
Definitive Security............................. 5
Depositary...................................... 5
Dollar.......................................... 5
Domestic Share Certificate...................... 5
Euroclear....................................... 6
Event of Default................................ 6
Excess Shares................................... 6
Exchange Act.................................... 6
Expiration Date................................. 6
Expiration Time................................. 6
Foreign Share Certificate....................... 6
Foreigner....................................... 6
<PAGE>
Contents, p. ii
Global Security................................. 7
Holder.......................................... 7
Indenture....................................... 7
Initial Purchasers.............................. 7
Initial Accredited Investor..................... 7
Interest Payment Date........................... 7
Issue Date...................................... 7
Maturity........................................ 7
Notice of Default............................... 8
Officers' Certificate........................... 8
Opinion of Counsel.............................. 8
Outstanding..................................... 8
Paying Agent.................................... 9
Permitted Percentage............................ 9
Person.......................................... 9
Predecessor Security............................ 9
Purchased Shares................................ 10
Qualified Institutional Buyer................... 10
Redemption Date................................. 10
Redemption Price................................ 10
Reference Date.................................. 10
Regular Record Date............................. 10
Regulation S.................................... 10
Regulation S Global Security.................... 10
Responsible Officer............................. 10
Restricted Global Security...................... 10
Restricted Period............................... 10
Rule 144A....................................... 10
Rule 144A Information........................... 10
Securities ..................................... 11
Securities Act.................................. 11
Security Register; Security Registrar........... 11
Senior Indebtedness............................. 11
Significant Subsidiary.......................... 11
Special Record Date............................. 12
Stated Maturity................................. 12
Subsidiary...................................... 12
Surrendered Securities.......................... 12
Trading Day .................................... 12
Trustee......................................... 12
Trust Indenture Act............................. 12
U.S. Depositary................................. 13
United States................................... 13
Unrestricted Global Security.................... 13
Vice President.................................. 13
SECTION 1.02. Compliance Certificates and Opinions............ 13
<PAGE>
Contents, p. iii
SECTION 1.03. Form of Documents Delivered to
Trustee....................................... 14
SECTION 1.04. Acts of Holders; Record Dates................... 14
SECTION 1.05. Notices, Etc., to Trustee and Company........... 18
SECTION 1.06. Notice to Holders; Waiver....................... 18
SECTION 1.07. Conflict with Trust Indenture Act............... 19
SECTION 1.08. Effect of Headings and Table of
Contents...................................... 19
SECTION 1.09. Successors and Assigns.......................... 19
SECTION 1.10. Separability Clause............................. 19
SECTION 1.11. Benefits of Indenture........................... 19
SECTION 1.12. Governing Law................................... 20
SECTION 1.13. Legal Holidays.................................. 20
ARTICLE II
Security Forms
--------------
SECTION 2.01. Forms Generally................................. 20
SECTION 2.02. Form of Face of Security........................ 22
SECTION 2.03. Form of Reverse of Security..................... 26
SECTION 2.04. Form of Trustee's Certificate of
Authentication................................ 34
SECTION 2.05. Form of Conversion Notice....................... 34
SECTION 2.06. Form of Certification........................... 37
SECTION 2.07. Form of Transfer Certificate.................... 38
ARTICLE III
The Securities
--------------
SECTION 3.01. Title and Terms; Issuable in Series............. 46
SECTION 3.02. Denominations................................... 48
SECTION 3.03. Execution, Authentication, Delivery
and Dating.................................... 48
SECTION 3.04. Temporary Securities............................ 49
SECTION 3.05. Registration; Registration of Transfer
and Exchange.................................. 50
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities.................................... 60
SECTION 3.07. Payment of Interest; Interest Rights
Preserved..................................... 61
SECTION 3.08. Persons Deemed Owners........................... 63
SECTION 3.09. Cancellation.................................... 63
SECTION 3.10. Computation of Interest......................... 64
<PAGE>
Contents, p. iv
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.01. Satisfaction and Discharge of
Indenture..................................... 64
SECTION 4.02. Application of Trust Money...................... 66
ARTICLE V
Remedies
--------
SECTION 5.01. Events of Default............................... 66
SECTION 5.02. Acceleration of Maturity;
Rescission and Annulment...................... 69
SECTION 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee.................... 70
SECTION 5.04. Trustee May File Proofs of Claim................ 71
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities...................... 72
SECTION 5.06. Application of Money Collected.................. 72
SECTION 5.07. Limitation on Suits............................. 73
SECTION 5.08. Unconditional Right of Holders to
Receive Principal, Premium and
Interest and to Convert....................... 74
SECTION 5.09. Restoration of Rights and Remedies.............. 74
SECTION 5.10. Rights and Remedies Cumulative.................. 74
SECTION 5.11. Delay or Omission Not Waiver.................... 75
SECTION 5.12. Control by Holders.............................. 75
SECTION 5.13. Waiver of Past Defaults......................... 75
SECTION 5.14. Undertaking for Costs........................... 76
SECTION 5.15. Waiver of Usury, Stay or Extension
Laws.......................................... 76
ARTICLE VI
The Trustee
-----------
SECTION 6.01. Certain Duties and
Responsibilities.............................. 76
SECTION 6.02. Notice of Defaults.............................. 78
SECTION 6.03. Certain Rights of Trustee....................... 78
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities........................ 80
SECTION 6.05. May Hold Securities............................. 80
SECTION 6.06. Money Held in Trust............................. 80
<PAGE>
Contents, p. v
SECTION 6.07. Compensation and Reimbursement.................. 80
SECTION 6.08. Disqualification; Conflicting
Interests..................................... 81
SECTION 6.09. Corporate Trustee Required;
Eligibility................................... 81
SECTION 6.10. Resignation and Removal; Appointment
of Successor.................................. 82
SECTION 6.11. Acceptance of Appointment by Successor.......... 83
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business........................ 84
SECTION 6.13 Preferential Collection of Claims
Against Company............................... 84
SECTION 6.14. Appointment of Authenticating Agent............. 84
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
-------------------------------------------------
SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Holders.......................... 87
SECTION 7.02. Preservation of Information;
Communications to Holders..................... 87
SECTION 7.03. Reports by Trustee.............................. 88
SECTION 7.04. Reports by Company.............................. 88
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 8.01. Company May Consolidate, Etc., Only
on Certain Terms.............................. 88
SECTION 8.02. Successor Substituted........................... 89
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without
Consent of Holders............................ 90
SECTION 9.02. Supplemental Indentures with Consent
of Holders.................................... 91
SECTION 9.03. Execution of Supplemental Indentures............ 92
SECTION 9.04. Effect of Supplemental Indentures............... 93
<PAGE>
Contents, p. vi
SECTION 9.05. Conformity with Trust Indenture Act............. 93
SECTION 9.06. Reference in Securities to
Supplemental Indentures....................... 93
ARTICLE X
Covenants
---------
SECTION 10.01. Payment of Principal, Premium and
Interest...................................... 93
SECTION 10.02. Maintenance of Office or Agency................. 93
SECTION 10.03. Money for Security Payments To Be
Held in Trust................................. 94
SECTION 10.04. Statement by Officers as to Default............. 96
SECTION 10.05. Existence....................................... 96
SECTION 10.06. Maintenance of Properties....................... 96
SECTION 10.07. Payment of Taxes and Other Claims............... 97
SECTION 10.08. Waiver of Certain Covenants..................... 97
SECTION 10.09. Delivery of Certain Information................. 97
ARTICLE XI
Redemption of Securities
------------------------
SECTION 11.01. Right of Redemption............................. 98
SECTION 11.02. Applicability of Article........................ 98
SECTION 11.03. Election To Redeem; Notice to Trustee........... 98
SECTION 11.04. Selection by Trustee of Securities
To Be Redeemed................................ 98
SECTION 11.05. Notice of Redemption............................ 99
SECTION 11.06. Deposit of Redemption Price..................... 100
SECTION 11.07. Securities Payable on Redemption Date........... 101
SECTION 11.08. Securities Redeemed in Part..................... 101
ARTICLE XII
Subordination of Securities
---------------------------
SECTION 12.01. Securities Subordinate to Senior
Indebtedness.................................. 102
SECTION 12.02. Payment Over of Proceeds Upon
Dissolution, Etc. ............................ 102
SECTION 12.03. No Payment When Senior Indebtedness
in Default.................................... 104
SECTION 12.04. Payment Permitted If No Default................. 104
<PAGE>
Contents, p. vii
SECTION 12.05. Subrogation to Rights of Holders of
Senior Indebtedness........................... 105
SECTION 12.06. Provisions Solely To Define Relative
Rights........................................ 105
SECTION 12.07. Trustee to Effectuate Subordination............. 106
SECTION 12.08. No Waiver of Subordination Provisions........... 106
SECTION 12.09. Notice to Trustee............................... 107
SECTION 12.10. Reliance on Judicial Order or
Certificate of Liquidating Agent.............. 108
SECTION 12.11. Trustee Not Fiduciary for Holders
of Senior Indebtedness........................ 108
SECTION 12.12. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of
Trustee's Rights.............................. 108
SECTION 12.13. Article Applicable to Paying Agents............. 109
SECTION 12.14. Certain Conversions Deemed Payment.............. 109
ARTICLE XIII
Conversion of Securities
------------------------
SECTION 13.01. Conversion Privilege and
Conversion Price.............................. 110
SECTION 13.02. Exercise of Conversion Privilege................ 111
SECTION 13.03. Fractions of Shares............................. 113
SECTION 13.04. Adjustment of Conversion Price.................. 113
SECTION 13.05. Notice of Adjustments of
Conversion Price.............................. 121
SECTION 13.06. Notice of Certain Corporate
Action........................................ 121
SECTION 13.07. Company To Reserve Common Stock................. 123
SECTION 13.08. Taxes on Conversions............................ 123
SECTION 13.09. Covenant as to Common Stock..................... 123
SECTION 13.10. Cancellation of Converted Securities............ 123
SECTION 13.11. Provisions in Case of Reclassification,
Consolidation, Merger or Sale of
Assets........................................ 123
ARTICLE XIV
Right To Require Repurchase
---------------------------
SECTION 14.01. Right To Require Repurchase..................... 124
SECTION 14.02. Notice; Method of Exercising
Repurchase Right.............................. 125
SECTION 14.03. Deposit of Repurchase Price..................... 126
<PAGE>
Contents, p. viii
SECTION 14.04. Securities Not Repurchased on
Repurchase Date............................... 126
SECTION 14.05. Securities Repurchased in Part.................. 126
SECTION 14.06. Certain Definitions............................. 127
ARTICLE XV
Defeasance and Covenant Defeasance
----------------------------------
SECTION 15.01. Company's Option To Effect Defeasance
or Covenant Defeasance........................ 128
SECTION 15.02. Defeasance and Discharge........................ 128
SECTION 15.03. Covenant Defeasance............................. 129
SECTION 15.04. Conditions to Defeasance or
Covenant Defeasance........................... 129
SECTION 15.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust;
Other Miscellaneous Provisions................ 133
SECTION 15.06. Reinstatement................................... 133
ARTICLE XVI
Immunity
--------
SECTION 16.01. Personal Immunity of Incorporators,
Stockholders, Directors and
Officers...................................... 134
TESTIMONIUM....................................................... 135
SIGNATURES AND SEALS.............................................. 135
ACKNOWLEDGMENTS................................................... 136
<PAGE>
INDENTURE, dated as of November 1, 1996, between SEACOR
HOLDINGS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the
"Company"), having its principal office at 5000 Railroad
Avenue, Morgan City, Louisiana 70380, and FIRST TRUST NATIONAL
ASSOCIATION, a National Association duly organized and
existing under the laws of the United States, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its 5 3/8%
Convertible Subordinated Notes Due November 15, 2006 (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
as follows:
<PAGE>
2
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
1. the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
2. all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
3. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation;
4. unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may be, of
this Indenture; and
5. the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms used in Article XIV have the meanings specified
therein.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person who
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person. For the
<PAGE>
3
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent Members" has the meaning specified in Section 3.05.
"Applicable Procedures" has the meaning specified in Section 3.05.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"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 a day on which banking institutions are open
for business and carrying out transactions in Dollars at the relevant place of
payment.
"CEDEL" has the meaning specified in Section 2.01.
"Closing Price" on any Trading Day with respect to the per share
price of Common Stock means the last reported sales price regular way or, in
case no such reported sale takes place on such Trading Day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if the Common Stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the National
Association of
<PAGE>
4
Securities Dealers Automated Quotations National Market System or, if the Common
Stock is not listed or admitted to trading on any national securities exchange
or quoted on such National Market System, the average of the closing bid and
asked prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm that is selected from time to time by the Company for that
purpose and is reasonably acceptable to the Trustee.
"Commencement Date" has the meaning specified in Section 13.04.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Section 13.11, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock of the Company
at the date of this instrument or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable
<PAGE>
5
provisions of this Indenture, and thereafter "Company" shall mean such successor
Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Agency" means the corporate trust agency located at
First Trust of New York, 100 Wall Street, 20th Floor, New York, New York 10005.
"Corporate Trust Office" means the principal office of the Trustee
in 180 East 5th Street, St. Paul, Minnesota 55101 at which at any particular
time its corporate trust business shall be administered.
"corporation" means a corporation, association,
company, joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in
Section 3.07.
"Definitive Security" means a certificated Security bearing the
restricted securities legend set forth in Section 2.02 and which is held by an
Institutional Accredited Investor in accordance with Section 2.01(c).
"Depositary" means, with respect to the Securities issued in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.05.
"Dollar" 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 debts.
"Domestic Share Certificate" means a certificate evidencing
ownership of shares of Common Stock, which certificate can only be held by
non-Foreigners.
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6
"Euroclear" has the meaning specified in Section 2.01.
"Event of Default" has the meaning specified in Section 5.01.
"Excess Shares" has the meaning specified in Section 2.03.
"Exchange Act" means the Securities Exchange Act of 1934 as it may
be amended from time to time, and any successor act thereto, and the rules and
regulations of the Commission promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.04.
"Expiration Time" has the meaning specified in Section 13.04.
"Foreign Share Certificate" means a certificate evidencing ownership
of shares of Common Stock, which certificate can be held by a Foreigner or a
non-Foreigner.
"Foreigner" means (i) any person (including an individual, a
partnership, a corporation or an association) who is not a United States citizen
(within the meaning of applicable maritime laws); (ii) any foreign government or
the representative thereof; (iii) any corporation of which its president or
other chief executive officer or chairman of its board of directors or person
authorized to act in the absence or disability of any of them is a Foreigner, or
of which more than a minority of the number of its directors necessary to
constitute a quorum are Foreigners; (iv) any corporation, partnership or
association which is not organized under the laws of the United States or a
state, territory, district or possession thereof; (v) any corporation of which a
twenty five percent (25%) or greater interest is owned beneficially or of record
by, or may be voted by, Foreigners, or which by any other means whatsoever is
controlled by or in which control is permitted to be exercised by Foreigners;
(vi) any partnership of which one or more of the general partners is a
Foreigner, or any partnership or association of which a twenty five percent
(25%) or greater interest is owned beneficially or of record
<PAGE>
7
by Foreigners or which by any other means is controlled by Foreigners; or (vii)
any person who acts as a representative or fiduciary for a Person described in
clauses (i) through (vi) above.
"Global Security" means any of the Restricted Global Security, the
Regulation S Global Security and the Unrestricted Global Security, as such terms
are defined in Section 2.01.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means CS First Boston Corporation, Salomon
Brothers Inc and Wasserstein Perella Securities, Inc.
"Institutional Accredited Investor" means an institutional
"accredited investor" as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Payment Date" means the Stated Maturity of an instalment
of interest on the Securities.
"Issue Date" means the date of first issuance of the Securities
under this Indenture.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security or an instalment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption, exercise of the repurchase
right or otherwise.
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8
"Notice of Default" means a written notice of the kind specified in
Section 5.01(3) or 5.01(4).
"Officers' Certificate" means a certificate signed by any of the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by any of the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.04 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption shall have been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee shall
have been made;
(iii) Securities which have been paid pursuant to Section 3.06 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
<PAGE>
9
(iv) Securities which have been defeased pursuant to Section 15.02;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, 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 and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Percentage" has the meaning specified in Section 2.03.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.06 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
<PAGE>
10
"Purchased Shares" has the meaning specified in Section 13.04.
"Qualified Institutional Buyer" means a "qualified institutional
buyer" as defined in Rule 144A.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed as set forth in the
Securities.
"Reference Date" has the meaning specified in Section 13.04.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the May 1 or November 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Regulation S" has the meaning specified in Section 2.01.
"Regulation S Global Security" has the meaning specified in Section
2.01.
"Responsible Officer", when used with respect to the Trustee, means
any officer or authorized employee of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Restricted Global Security" has the meaning specified in Section
2.01.
"Restricted Period" has the meaning specified in Section 2.01.
"Rule 144A" has the meaning specified in Section 2.01.
"Rule 144A Information" has the meaning specified in Section 10.09.
<PAGE>
11
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture and "Security" means one of such Securities.
"Securities Act" means the Securities Act of 1933 as it may be
amended from time to time, and any successor act thereto, and the rules and
regulations of the Commission promulgated thereunder.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
"Senior Indebtedness" means the principal of and premium, if any,
and interest on all indebtedness of the Company for money borrowed, other than
the Securities, whether outstanding on the date of execution of the Indenture or
thereafter created, incurred, guaranteed or assumed, except such indebtedness
that by the terms of the instrument or instruments by which such indebtedness
was created or incurred expressly provides that it (i) is junior in right of
payment to the Securities or any other indebtedness of the Company for borrowed
money or (ii) ranks pari passu in right of payment to the Securities. The term
"indebtedness for money borrowed" when used with respect to the Company is
defined to mean (i) any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, (ii) all obligations of the
Company with respect to interest rate hedging agreements to hedge interest rates
relating to Senior Indebtedness of the Company, (iii) any deferred payment
obligation of, or any such obligation guaranteed by, the Company for the payment
of the purchase price of property or assets evidenced by a note or similar
instrument, and (iv) any obligation of, or any such obligation guaranteed by,
the Company for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Company under generally accepted
accounting principles.
"Significant Subsidiary" means any Subsidiary which would be a
"Significant Subsidiary" as defined in Rule 1-02 of Regulation S-X under the
Securities Act and the
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12
Exchange Act (as such regulation may from time to time be amended).
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment 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
which 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.
"Surrendered Securities" has the meaning specified in Section 2.06.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed and the rules and
regulations thereunder; provided, however, that in the event the Trust Indenture
Act of 1939 or such rules and regulations are amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 and such rules and regulations as so amended.
<PAGE>
13
"U.S. Depositary" has the meaning specified in Section 2.01.
"United States" means the United States of America (including the
States thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
"Unrestricted Global Security" has the meaning specified in Section
2.01.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
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14
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an
<PAGE>
15
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
<PAGE>
16
action provided or permitted by this Indenture to be given or taken by Holders
of Securities; provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Securities on such record date;
and provided, further, that for the purpose of determining whether Holders of
the requisite principal amount of such Securities have taken such action, no
Security shall be deemed to have been Outstanding on such record date unless it
is also Outstanding on the date such action is to become effective. Nothing in
this paragraph shall prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action taken by Holders of
the requisite principal amount of Outstanding Securities on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities in the manner set forth in
Section 1.06.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 5.02, (iii) any request to institute proceedings referred
to in Section 5.07(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such
<PAGE>
17
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities on such record date; and provided, further, that for the purpose of
determining whether Holders of the requisite principal amount of such Securities
have taken such action, no Security shall be deemed to have been Outstanding on
such record date unless it is also Outstanding on the date such action is to
become effective. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of Securities in the manner set forth in Section
1.06.
With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 1.06, on or
before the existing Expiration Date. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date and, if an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the party hereto that set such record date
shall be deemed to have designated the 180th day after such record date as the
Expiration Date with respect thereto.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more
<PAGE>
18
duly appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.05. Notices, Etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficiently given if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate
Finance, or
(2) the Company by the Trustee or by any Holder shall be
sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
<PAGE>
19
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act which is required under such Act to be a part of and govern this Indenture,
the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be. To the extent a Security
conflicts with a provision in the Indenture, the Indenture governs.
SECTION 1.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.
SECTION 1.10. Separability Clause. 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 not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of Senior
Indebtedness and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
<PAGE>
20
SECTION 1.12. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK.
SECTION 1.13. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date or Stated Maturity of any Security or the
last date on which a Holder has the right to convert his Securities shall not be
a Business Day then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal (and premium, if any) or
conversion of the Securities need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date, Redemption Date, Repurchase Date or at the Stated
Maturity, or on such last day for conversion, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, Repurchase Date or Stated Maturity, as the case may be.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities of each series and the
Trustee's certificates of authentication shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or Depositary therefor or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
The definitive Securities 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 of such Securities.
<PAGE>
21
In certain cases described elsewhere herein, the legends set forth
in the first four paragraphs of Section 2.02 may be omitted from Securities
issued hereunder.
(a) Regulation S Securities. Securities offered and sold in reliance
on Regulation S ("Regulation S") under the Securities Act shall be issued in the
form of a single Global Security in definitive, fully registered form without
interest coupons, substantially in the form of Security set forth in Sections
2.02 and 2.03, with such applicable legends as are provided for in Section 2.02,
except as otherwise permitted herein. Such Global Security shall be registered
in the name of a nominee of The Depositary Trust Company (the "U.S. Depositary")
and deposited with the Trustee, as custodian for the U.S. Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided, for credit to the respective accounts of beneficial owners of the
Securities (or to such other accounts as they may direct) at Morgan Guaranty
Trust Company of New York, Brussels office, as operator of the Euroclear System
("Euroclear"), or Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL").
Until such time as the Restricted Period (as defined below) shall have
terminated, such Global Security shall be referred to herein as the "Regulation
S Global Security". After such time as the Restricted Period shall have
terminated, such Global Security shall be referred to herein as the
"Unrestricted Global Security". The aggregate principal amount of the Regulation
S Global Security or the Unrestricted Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the U.S. Depositary, in connection with a corresponding decrease
or increase in the aggregate principal amount of the Restricted Global Security
or in consequence of the issue of Definitive Notes, as hereinafter provided. As
used herein, the term "Restricted Period" means the period of 40 consecutive
days beginning on and including the later of (i) the day that the Initial
Purchasers advise the Company and the Trustee is the day on which the Securities
are first offered to persons other than distributors (as defined in Regulation
S) in reliance on Regulation S and (ii) the day on which the closing for the
offering of the Securities occurs.
<PAGE>
22
(b) Rule 144A Securities. Securities offered and sold in reliance on
Rule 144A ("Rule 144A") under the Securities Act shall be issued in the form of
a single Global Security (the "Restricted Global Security") in definitive, fully
registered form without interest coupons, substantially in the form of Security
set forth in Sections 2.02 and 2.03, with such applicable legends as are
provided for in Section 2.02, except as otherwise permitted herein. Such Global
Security shall be registered in the name of a nominee of the U.S. Depositary and
deposited with the Trustee, at its New York office, as custodian for the U.S.
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the U.S. Depositary, in connection
with a corresponding decrease or increase in the aggregate principal amount of
the Regulation S Global Security or the Unrestricted Global Security or in
consequence of the issue of Definitive Notes, as hereinafter provided.
(c) Definitive Securities. Except as provided in this Section 2.01
or Section 3.05, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities. Purchasers of
Securities who are Institutional Accredited Investors and are not Qualified
Institutional Buyers and did not purchase Securities sold in reliance on
Regulation S will receive Definitive Securities; provided, however, that upon
transfer of such Definitive Securities to a Qualified Institutional Buyer, such
Definitive Securities will, unless the Global Security has previously been
exchanged, be exchanged for an interest in a Global Security pursuant to the
provisions of Section 3.05.
SECTION 2.02. Form of Face of Security. [INCLUDE IF SECURITY IS A
RESTRICTED GLOBAL SECURITY OR A REGULATION S GLOBAL SECURITY--THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON THE CONVERSION
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR IN A TRANSACTION EXEMPT
<PAGE>
23
FROM, OR NOT SUBJECT TO, THE SECURITIES ACT. EACH PURCHASER OF THIS SECURITY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY AND THE COMMON STOCK ISSUABLE
UPON THE CONVERSION THEREOF, MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.]
[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON THE CONVERSION THEREOF
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY--THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, 55 WATER
STREET, NEW YORK, NEW YORK 10004, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., ANY
TRANSFER,
<PAGE>
24
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[INCLUDE IF SECURITY IS A DEFINITIVE SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
IMPORTANT
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF ARE
SUBJECT TO CERTAIN LIMITATIONS ON FOREIGN OWNERSHIP AND AS A CONDITION TO THE
RECEIPT OF COMMON STOCK UPON CONVERSION HOLDERS WILL BE REQUIRED TO FURNISH A
CERTIFICATION AS TO, AND UNDER CERTAIN CIRCUMSTANCES, ADDITIONAL PROOF OF, THEIR
CITIZENSHIP. IN ADDITION, A FOREIGN HOLDER MAY, BY REASON OF SUCH LIMITATIONS,
RECEIVE A LESSER NUMBER OF SHARES OF COMMON STOCK UPON CONVERSION THAN IT
OTHERWISE MAY BE ENTITLED TO RECEIVE PURSUANT TO THE TERMS OF THIS SECURITY AND
THE INDENTURE.
SEACOR Holdings, Inc.
5 3/8% Convertible Subordinated Notes Due November 15, 2006
CUSIP No. __________ $________
ISIN No. __________
SEACOR Holdings, Inc., a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________, or registered assigns, the
principal sum of ___________ Dollars on November 15, 2006, and to pay interest
thereon from November 5, 1996, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on May 15 and
November 15 in each year, commencing May 15, 1997, at the rate of 5 3/8% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly
<PAGE>
25
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the May 1 or November 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the Corporate Trust Office, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts by a check drawn on an account maintained
with a bank in Minneapolis, Minnesota; provided, however, that upon application
by the Holder to the Security Registrar not later than the April 15 or October
15 immediately preceding the relevant Interest Payment Date, such Holder may
receive payment by wire transfer of Dollars to a U.S. Dollar account (such
transfers to be made only to Holders of an aggregate principal amount in excess
of U.S. $5,000,000) maintained by the payee with a bank in the United States or
in Europe and designated by the payee to the Security Registrar.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be
<PAGE>
26
entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
SEACOR HOLDINGS, INC.,
by
-----------------------
Name:
Title:
Attest:
- ----------------------------
Name:
Title:
SECTION 2.03. Form of Reverse of Security. This Security is one of a
duly authorized issue of Securities of the Company designated as its 5 3/8%
Convertible Subordinated Notes Due November 15, 2006 (herein called the
"Securities"), limited in aggregate principal amount to $200,000,000, issued and
to be issued under an Indenture, dated as of November 1, 1996 (herein called the
"Indenture"), between the Company and First Trust National Association, as
Trustee for the Holders of Securities issued under said Indenture (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior
Indebtedness and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
<PAGE>
27
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or before
the close of business on the Business Day immediately preceding November 15,
2006, or in case this Security or a portion hereof is called for redemption,
then in respect of this Security or such portion hereof until and including, but
(unless the Company defaults in making the payment due upon redemption) not
after, the close of business on the Business Day immediately preceding the
corresponding Redemption Date, to convert this Security (or any portion of the
principal amount hereof which is $1,000 or an integral multiple thereof), at the
principal amount hereof, or of such portion, into fully paid and non-assessable
shares of Common Stock of the Company (in the form of a Domestic Share
Certificate or a Foreign Share Certificate, as applicable) at a conversion price
equal to $66 aggregate principal amount of Securities for each share of Common
Stock (or at the current adjusted conversion price if an adjustment has been
made as provided in Article XIII of the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank, to the Company
at its office or agency in the Borough of Manhattan, The City of New York or to
the Corporate Trust Agency accompanied by written notice to the Company that the
Holder hereof elects to convert this Security, or if less than the entire
principal amount hereof is to be converted, the portion hereof to be converted,
and, in case such surrender shall be made during the period from the close of
business on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date (unless this Security or the portion hereof
being converted has been called for redemption on a Redemption Date within such
period between and including such Regular Record Date and such Interest Payment
Date), also accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted. Subject to the aforesaid
requirement for payment of interest and, in the case of a conversion after the
close of business on any Regular Record Date and on or before the corresponding
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
instalment of interest (even if the Security has been called for redemption on a
Redemption Date within such period), no
<PAGE>
28
payment or adjustment is to be made on conversion for interest accrued hereon or
for dividends on the Common Stock issued on conversion. No fractions of shares
or scrip representing fractions of shares will be issued on conversion, but
instead of any fractional interest the Company shall pay a cash adjustment as
provided in Article XIII of the Indenture. The conversion price is subject to
adjustment as provided in Article XIII of the Indenture. In addition, the
Indenture provides that in case of certain reclassifications, consolidations,
mergers, sales or transfers of assets or other transactions pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon the transaction by a holder of the number of shares of
Common Stock into which this Security might have been converted immediately
prior to such transaction (assuming such holder of Common Stock failed to
exercise any rights of election and received per share the kind and amount
received per share by a plurality of non-electing shares).
Because the Company's vessels operate in the United States coastwise
trade, the Shipping Act, 1916, as amended, requires that not more than twenty
five percent (25%) of the Company's capital stock be owned or controlled by
"Foreigners," as defined in the Indenture. The Holder of this Security is
entitled to receive, upon conversion, a Domestic Share Certificate only if the
shares of Common Stock represented by the Domestic Share Certificate are not to
be held by or for the account of a Foreigner. Otherwise, the Holder of this
Security is entitled to receive, upon conversion, only a Foreign Share
Certificate.
If the holder of a Domestic Share Certificate is a Foreigner, or
holds shares for the account of a Foreigner, such certificate must be exchanged
immediately for a Foreign Share Certificate, subject to the limitations set
forth below. If the holder of a Foreign Share Certificate is a U.S. citizen, or
should shares of Common Stock which are represented by a Foreign Share
Certificate be sold or transferred to a U.S. citizen, such holder or transferee
may
<PAGE>
29
exchange his or its certificate for a Domestic Share Certificate.
The Company's Certificate of Incorporation contains provisions
limiting the aggregate percentage ownership by Foreigners of any class of the
Company's capital stock (including the Common Stock) to twenty-two and one-half
percent (22.5%) of the outstanding shares of such class (the "Permitted
Percentage") to ensure that such Foreign ownership will not exceed the maximum
percentage permitted by applicable law, and authorizes the Board of Directors,
under certain circumstances, to increase the foregoing percentage to twenty-four
percent (24%).
Any purported transfer to Foreigners of shares of Common Stock or of
an interest in shares of Common Stock of the Company represented by a Domestic
Share Certificate which increases the aggregate ownership by Foreigners above
the then Permitted Percentage (the "Excess Shares") will be ineffective as
against the Company for all purposes (including for purposes of voting and
dividends), and such transfer shall not be recognized or recorded on the books
of the Company, except that a subsequent transfer of such Excess Shares to a
U.S. citizen would be recognized by the Company as valid and recorded as such.
The Holder of this Security will not be entitled to convert this Security, or a
portion hereof, if such Holder is a Foreigner or holding for the account of a
Foreigner and the conversion will, in the good faith judgment of the Company,
increase the aggregate ownership by Foreigners above the then Permitted
Percentage.
If the Permitted Percentage is exceeded, the Company is authorized
pursuant to the Certificate of Incorporation to temporarily withhold dividends
and other distributions on the Excess Shares, pending the transfer of such
shares to a U.S. citizen or a reduction in the aggregate percentage of shares
owned by Foreigners to or below the Permitted Percentage, and to deny voting
rights with respect to the Excess Shares. In addition, the Company is
authorized, in its discretion, to redeem (upon written notice) the Excess Shares
in order to reduce the aggregate Foreign ownership thereof to the Permitted
Percentage. The Foreign-owned shares to be redeemed would be selected solely by
reference to the date or dates on which such shares were acquired, starting with
the most recently acquired shares
<PAGE>
30
and including, in reverse chronological order, all other acquisitions of shares
by Foreigners from and after the acquisition which first caused the Permitted
Percentage to be exceeded; provided that if more than one such acquisition by
Foreigners is made on a particular day which results in the Permitted Percentage
being exceeded, the selection of shares to be redeemed would be made on a pro
rata basis in proportion to the respective number of shares acquired by each
such Foreign acquiror on such date.
The Company will furnish to any Holder, upon request and without
charge, copies of the Certificate of Incorporation and By-laws of the Company
then in effect. Any such request may be addressed to the Company or to the
Security Registrar.
The Securities are subject to redemption upon not less than 30 days
or more than 60 days, notice by mail, at any time on or after November 24, 1999,
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount), if
redeemed during the 12-month period beginning on November 24 of the years
indicated,
Year Percentage Year Percentage
- ---- ---------- ---- ----------
1999 103.58% 2002 101.79%
2000 102.99% 2003 101.19%
2001 102.39% 2004 100.60%
; and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to (but not
including) the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In certain circumstances involving a Change in Control, each Holder
shall have the right to require the
<PAGE>
31
Company to redeem all or part of its Securities at a repurchase price equal to
100% of the principal amount thereof, together with accrued and unpaid interest
through the Repurchase Date.
The Securities do not have the benefit of any sinking fund.
In the event of redemption, conversion or repurchase of this
Security in part only, a new Security or Securities for the unredeemed,
unconverted or unrepurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder or the
holder of shares of Common Stock issued upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or such holder of shares of Common Stock issued upon
conversion, or to a prospective purchaser of any such security designated by any
such Holder or holder of shares of Common Stock, as the case may be, to the
extent required to permit compliance by such Holder or holder of shares of
Common Stock with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto).
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
<PAGE>
32
If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with the
effect provided in Article V of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
Corporate Trust Office duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
<PAGE>
33
The Securities are issuable only in registered form without coupons
in denominations of $1,000 (or, in the case of Definitive Securities sold to
Institutional Accredited Investors, minimum denominations of $250,000) and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not payment of or on this Security is
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
34
SECTION 2.04. Form of Trustee's Certificate of
Authentication.
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ___________________________,
as Trustee
by_________________________
Authorized Signatory
SECTION 2.05. Form of Conversion Notice.
CONVERSION NOTICE
To: SEACOR Holdings, Inc.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, at any time after 60
days following the date of original issuance thereof, into shares of Common
Stock (in the form of a Domestic Share Certificate or a Foreign Share
Certificate, as applicable) in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for a fractional
share and any Security representing any unconverted principal amount hereof, be
issued and delivered to the registered owner hereof unless a different name has
been provided below. If shares or any portion of this Security not converted are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith a certificate in proper form certifying that the applicable
restrictions on transfer have been complied with. Any amount required to be paid
by the undersigned on account of interest accompanies this Security.
<PAGE>
35
The undersigned (the "Applicant") hereby makes application for the
issuance of record to the name of the Applicant of shares of Common Stock and
hereby certifies to the Company that:
The Applicant IS [_] IS NOT [_] a "Foreigner."*
The Applicant WILL [_] WILL NOT [_] hold or control the shares
applied for, or any of them, or any interest in any of them, for or on behalf of
a "Foreigner."
The Applicant hereby agrees that, promptly after request of the
Company, he or it will furnish such proof in support of this certification as
the Company or the Security Registrar for the Common Stock may, from time to
time, request.
DATE: _______________
----------------------------------
Signature(s) of Applicant
(If the Applicant is a corporation, partnership or
fiduciary, the title of the Person signing on
behalf of the Applicant must be stated.)
* DEFINITION OF "FOREIGNER"
A "Foreigner" is:
(1) Any person (including an individual, a partnership, a corporation or an
association) who is not a United States citizen (within the meaning of
applicable maritime laws);
(2) any foreign government or the representative thereof;
(3) any corporation of which its president or other chief
executive officer or chairman of its board of directors or person
authorized to act in the absence or disability of any of them is a
Foreigner, or of which more than a minority of the number of its directors
necessary to constitute a quorum for the transaction of business are
Foreigners;
<PAGE>
36
(4) any corporation, partnership or association which is not organized under
the laws of the United States or a state, territory, district or
possession thereof;
(5) any corporation of which a twenty five percent (25%) or greater interest
is owned beneficially or of record by, or may be voted by, Foreigners, or
which by any other means whatsoever is controlled by or in which control
is permitted to be exercised by Foreigners;
(6) any partnership of which one or more of the general partners is a
Foreigner, or any partnership or association of which a twenty five
percent (25%) or greater interest is owned beneficially or of record by
Foreigners or which by any other means is controlled by Foreigners; or
(7) any person who acts as a representative or fiduciary for a Person
described in clauses (1) through (6) above.
NOTICE: This certification constitutes a basis for the
Company's representation to the United States
Government that it is a citizen within the meaning
of the Shipping Act, 1916, as amended. Any person
making a statement herein which he or it knows to
be false may be proceeded against under Title 18,
United States Code, Section 10.01, which section
provides penalties of up to five years
imprisonment or a fine of up to $10,000.
Signature(s) must be Medallion Guaranteed by a national bank or trust company or
a member firm of a national stock exchange or a member of the National
Association of Securities Dealers, Inc. if shares of Common Stock are to be
delivered, or unconverted Securities are to be issued, other than to and in the
name of the registered owner.
- ------------------------------
Signature Guarantee
Fill in for registration of shares if they are to be delivered, or unconverted
Securities if they are to be issued, other than to and in the name of the
registered owner:
- ------------------------------
(Name)
- ------------------------------
(Street Address)
- ------------------------------
(City, State and zip code)
(Please print name and address)
Register: __ Common Stock
__ Securities
(Check appropriate line(s))
Principal amount to be converted (if less than
all):
$_____,000
----------------------------------
Social Security or other Taxpayer
Identification Number of owner
SECTION 2.06. Form of Certification.
TRANSFER CERTIFICATE
The undersigned registered owner of this Security hereby certifies
with respect to $________ principal amount of the above-captioned securities
presented or surrendered on the date hereof (the "Surrendered Securities") for
registration of transfer, or for exchange or conversion where the securities
issuable upon such exchange or conversion are to be registered in a name other
than that of the undersigned registered owner (each such transaction
<PAGE>
37
being a "transfer"), that such transfer complies with the restrictive legend set
forth on the face of the Surrendered Securities for the reason checked below:
___________ The transfer of the Surrendered
Securities complies with Rule 144
under the U.S. Securities Act of
1933, as amended (the "Securities
Act"); or
___________ The transfer of the Surrendered
Securities complies with Rule 144A
under the Securities Act; or
___________ The transfer of the Surrendered
Securities complies with Rule 903
or 904 of Regulation S under the
Securities Act; or
___________ The transfer of the Surrendered
Securities is to an institutional
accredited investor, as defined
under Rule 501 of Regulation D
under the Securities Act; or
___________ The transfer of the Surrendered
Securities is pursuant to an
effective registration statement
under the Securities Act.
DATE: ___________________
-------------------
Signature(s)
(If the registered owner is a corporation, partnership
or fiduciary, the title of the Person signing on behalf
of such registered owner must be stated.)
SECTION 2.07. Form of Transfer Certificate. (a) Whenever any
certification is to be given by a
<PAGE>
38
beneficial owner of a portion of the Restricted Global Security pursuant to
Section 3.05(b)(ii) in connection with the transfer of a beneficial interest in
the Restricted Global Security to a Person who wishes to take delivery thereof
in the form of a beneficial interest in the Regulation S Global Security, such
certification shall be provided substantially in the form of the following
certificate, with only such changes as shall be approved by the Company and the
Initial Purchasers.
FORM OF TRANSFER CERTIFICATE*
FOR TRANSFER FROM RESTRICTED GLOBAL
SECURITY TO REGULATION S GLOBAL SECURITY
(TRANSFERS PURSUANT TO SECTION 3.05(B)(II)
OF THE INDENTURE)
First Trust National Association
as Trustee
Re: Seacor Holdings, Inc.
5 3/8% Convertible Subordinated Notes
Due November 15, 2006 (the "Securities")
Reference is hereby made to the Indenture, dated as of November 1,
1996 (the "Indenture"), between Seacor Holdings, Inc., as Issuer, and First
Trust National Association, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the
Indenture.
This letter relates to U.S. $______________ principal amount of
Securities which are evidenced by the Restricted Global Security (CUSIP No.
______) and held with the U.S. Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Securities to a Person who will take delivery thereof
in the form of an equal principal amount of Securities evidenced by the
Regulation S Global Security (CUSIP No. ______), which amount, immediately after
such transfer, is to be held with the U.S. Depositary through Euroclear or CEDEL
or both.
<PAGE>
39
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected pursuant
to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor does hereby further certify that:
(1) the offer of the Securities was not made to a
person in the United States;
(2) either:
(A) at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee was
outside the United States, or
(B) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above was held with the U.S. Depositary
through Euroclear or CEDEL or both.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers. Terms used in this
certificate and not
<PAGE>
40
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
Dated: [Insert Name of Transferor],
by__________________________
Name:
Title:
(If the registered owner is a corporation, partnership
or fiduciary, the title of the Person signing on behalf
of such registered owner must be stated.)
cc: Seacor Holdings, Inc.
- ----------------------------
* If the Security is a Definitive Security, appropriate changes need to be
made to this form of transfer certificate.
(b) Whenever any certification is to be given by a beneficial owner
of a portion of the Restricted Global Security pursuant to Section 3.05(b)(iii)
in connection with the transfer of a beneficial interest in the Restricted
Global Security to a Person who wishes to take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Security, such certification
shall be provided substantially in the form of the following certificate, with
only such changes as shall be approved by the Company and Initial Purchasers.
<PAGE>
41
FORM OF TRANSFER CERTIFICATE*
FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
TO UNRESTRICTED GLOBAL SECURITY
(TRANSFERS PURSUANT TO SECTION 3.05(B)(III)
OF THE INDENTURE)
First Trust National Association,
as Trustee
Re: Seacor Holdings, Inc.
5 3/8% Convertible Subordinated Notes
Due November 15, 2006 (the "Securities")
Reference is hereby made to the Indenture, dated as of November 1,
1996 (the "Indenture"), between Seacor Holdings, Inc., as Issuer, and First
Trust National Association, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the
Indenture.
This letter relates to U.S. $_________________ principal amount of
Securities which are evidenced by the Restricted Global Security (CUSIP No.
______) and held with the U.S. Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Securities to a Person that will take delivery
thereof in the form of an equal principal amount of Securities evidenced by the
Unrestricted Global Security (CUSIP No. ______).
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected pursuant
to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States
Securities Act of 1933, as amended (the "Securities Act") and accordingly the
Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904:
<PAGE>
42
(A) the offer of the Securities was not made to a person
in the United States;
(B) either:
(i) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any person acting on its behalf reasonably believed that the
transferee was outside the United States, or
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a buyer in the
United States;
(C) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable; and
(D) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; or
(2) if the transfer has been effected pursuant to Rule 144, the
Securities have been transferred in a transaction permitted by Rule 144.
This certificate and the statements contained herein are made for the benefit of
the Company and the Initial Purchasers. Terms used in this certificate and not
<PAGE>
43
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
Dated: [Insert Name of Transferor],
by
-------------------------
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)
cc: Seacor Holdings, Inc.
- ---------------------------
* If the Security is a Definitive Security, appropriate changes need to be
made to this form of transfer certificate.
(c) Whenever any certification is to be given by a beneficial owner of a portion
of the Regulation S Global Security pursuant to Section 3.05(b)(iv) in
connection with the transfer of a beneficial interest in the Regulation S Global
Security to a Person who wishes to take delivery thereof in the form of a
beneficial interest in the Restricted Global Security, such certification shall
be provided substantially in the form of the following certificate, with only
such changes as may be approved by the Company and the Initial Purchasers.
<PAGE>
44
FORM OF TRANSFER CERTIFICATE*
FOR TRANSFER FROM REGULATION S
GLOBAL SECURITY TO RESTRICTED GLOBAL SECURITY
(TRANSFERS PURSUANT TO SECTION 3.05(B)(IV)
OF THE INDENTURE)
First Trust National Association,
as Trustee
Re: Seacor Holdings, Inc.
5 3/8% Convertible Subordinated Notes
Due November 15, 2006 (the "Securities")
Reference is hereby made to the Indenture, dated as of November 1,
1996 (the "Indenture"), between Seacor Holdings, Inc., as Issuer, and First
Trust National Association, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the
Indenture.
This letter relates to U.S. $______________ principal amount of
Securities which are evidenced by the Regulation S Global Security (CUSIP No.
______) and held with the U.S. Depository through Euroclear or CEDEL or both in
the name of [insert name of transferor] (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Securities to a Person
that will take delivery thereof in the form of an equal principal amount of
Securities evidenced by the Restricted Global Security (CUSIP No. ______)
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected pursuant
to and in accordance with Rule 144A under the United States Securities Act of
1933, as amended, and accordingly the Transferor does hereby further certify
that the Securities are being transferred to a person that the Transferor
reasonably believes is purchasing the Securities for its own account, or for one
or more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A and in
<PAGE>
45
accordance with any applicable securities laws of any state
of the United States.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers.
Dated: [Insert Name of Transferor],
by
-------------------------
Name:
Title:
(If the registered owner is a corporation, partnership
or fiduciary, the title of the Person signing on behalf
of such registered owner must be stated.)
cc: Seacor Holdings, Inc.
- ---------------------------
* If the Security is a Definitive Security, appropriate changes need to be
made to this form of transfer certificate.
ARTICLE III
The Securities
SECTION 3.01. Title and Terms; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is $200,000,000. The Trustee shall authenticate Securities for
original issue on the Issue Date in the aggregate principal amount of
$150,000,000.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and set forth, or determined in
the manner provided in an Officers' Certificate, or established in one
<PAGE>
46
or more indentures supplemental hereto, prior to the issuance of Securities of
any series (other than the series issued on the Issue Date):
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) the aggregate principal amount of the Securities of the series
which may be authenticated and delivered under this Indenture, which
(other than the Securities being sold to the Initial Purchasers) shall be
in aggregate principal amounts of not less than $5.0 million per series
and not to exceed $27.5 million in the aggregate (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
Sections 3.04, 3.05, 3.06, 9.06, 11.08, 13.02 or 14.05 and except for
Securities which, pursuant to Section 3.03, are deemed never to have been
authenticated and delivered hereunder); and
(3) the date from which interest on such Securities shall accrue.
All Securities of any one series shall be substantially identical
except as to denomination. All Securities shall be substantially identical in
all respects except as to issuance dates, issuance prices, denominations and the
matters referred to in clauses (1) through (3) above.
If any of the terms of any series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or any Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate or the trust indenture supplemental thereto setting forth the terms
of the series.
The Stated Maturity of the Securities shall be November 15, 2006,
and they shall bear interest at the rate of 5 3/8% per annum, payable
semi-annually on May 15 and November 15, commencing May 15, 1997, until the
principal thereof is paid or made available for payment.
<PAGE>
47
The principal of (and premium, if any) and interest on the
Securities shall be payable at the Corporate Trust Office and at any other
office or agency maintained by the Company for such purpose by check drawn on an
account maintained with a bank in Minneapolis, Minnesota; provided, however,
that upon application by the Holder to the Security Registrar not later than the
April 15 or October 15 immediately preceding the relevant Interest Payment Date,
such Holder may receive payment by wire transfer to a U.S. Dollar account (such
transfers to be made only to Holders of an aggregate principal amount in excess
of U.S. $5,000,000) maintained by the payee with a bank in the United States or
in Europe.
The Securities shall be redeemable by the Company as provided in
Article XI.
The Securities shall be subordinated in right of payment to the
prior payment in full of Senior Indebtedness as provided in Article XII.
The Securities shall be convertible as provided in Article XIII.
The Securities shall be subject to purchase by the Company at the
option of the Holder as provided in Article XIV.
SECTION 3.02. Denominations. The Securities shall be issuable only
in registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by any of its Chairman of
the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwith-
<PAGE>
48
standing that such individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Securities or did not hold such
offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
10.02, without charge to the Holder.
<PAGE>
49
Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 3.05. Registration; Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers and exchanges thereof. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges thereof as herein provided. Upon
surrender for registration of transfer or exchange of any Security at an office
or agency of the Company designated pursuant to Section 10.02 for such purpose,
accompanied by a written instrument of transfer or exchange in the form provided
by the Company, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of the same series, of any authorized denominations and of a
like aggregate principal amount.
(b) Notwithstanding any other provisions of this Indenture or the
Securities, (A) transfers of a Global Security, in whole or in part, and
transfers of interests therein of the kind described in clauses (ii), (iii) or
(iv) below, shall be made only in accordance with this Section 3.05(b), (B) all
transfers of an interest in the Regulation S Global Security shall comply with
Section 3.05(b)(vi) below and (C) transfers of a Definitive Security shall
comply with Section 3.05(b)(vii) and (viii) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any Person other than the U.S.
Depositary or a nominee thereof, and no such transfer to any such other
<PAGE>
50
Person may be registered; provided that this clause (i) shall not prohibit
any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to
any Person shall be effective under this Indenture or the Securities
unless and until such Security has been registered in the name of such
Person. Nothing in this Section 3.05(b)(i) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Security
effected in accordance with the other provisions of this Section 3.05(b).
(ii) Restricted Global Security to Regulation S Global Security. If
the holder of a beneficial interest in the Restricted Global Security
wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the
Regulation S Global Security, such transfer may be effected, subject to
the rules and procedures of the U.S. Depositary, Euroclear and CEDEL, in
each case to the extent applicable (the "Applicable Procedures"), only in
accordance with the provisions of this Section 3.05(b)(ii). Upon receipt
by the Trustee, as Security Registrar, at its Corporate Trust Office of
(1) written instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or cause
to be credited to a specified Agent Member's account a beneficial interest
in the Regulation S Global Security in a principal amount equal to that of
the beneficial interest in the Restricted Global Security to be so
transferred, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Agent
Member (and the Euroclear or CEDEL account, as the case may be) to be
credited with, and the account of the Agent Member to be debited for, such
beneficial interest and (3) a certificate in substantially the form set
forth in Section 2.07(a) given by the holder of such beneficial interest,
the Trustee, as Security Registrar, shall instruct the U.S. Depositary to
reduce the principal amount of the Restricted Global Security, and to
increase the principal amount of the Regulation S Global Security, by the
principal amount of the beneficial interest in the Restricted Global
Security
<PAGE>
51
to be so transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions (which shall be the Agent
Member for Euroclear or CEDEL or both, as the case may be) a beneficial
interest in the Regulations S Global Security having a principal amount
equal to the amount by which the principal amount of the Restricted Global
Security was reduced upon such transfer.
(iii) Restricted Global Security to Unrestricted Global Security. If
the holder of a beneficial interest in the Restricted Global Security
wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Security, such transfer may be effected, subject to
the Applicable Procedures, only in accordance with this Section
3.05(b)(iii). Upon receipt by the Trustee, as Security Registrar, at its
Corporate Trust Office of (1) written instructions given in accordance
with the Applicable Procedures from an Agent Member directing the Trustee
to credit or cause to be credited to a specified Agent Member's account a
beneficial interest in the Unrestricted Global Security in a principal
amount equal to that of the beneficial interest in the Restricted Global
Security to be so transferred, (2) a written order given in accordance
with the Applicable Procedures containing information regarding the
account of the Agent Member (and the Euroclear or CEDEL account, as the
case may be) to be credited with, and the account of the Agent Member to
be debited for, such beneficial interest and (3) a certificate in
substantially the form set forth in Section 2.07(b) given by the holder of
such beneficial interest, the Trustee, as Security Registrar, shall
instruct the U.S. Depositary to reduce the principal amount of the
Restricted Global Security, and to increase the principal amount of the
Unrestricted Global Security, by the principal amount of the beneficial
interest in the Restricted Global Security to be so transferred, and to
credit or cause to be credited to the account of the Person specified in
such instructions (which shall be the Agent Member for Euroclear or CEDEL
or both, as the case may be) a beneficial interest in the Unrestricted
Global Security having a principal amount
<PAGE>
52
equal to the amount by which the principal amount of the Restricted Global
Security was reduced upon such transfer.
(iv) Regulation S Global Security to Restricted Global Security. If
the holder of a beneficial interest in the Regulation S Global Security
wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the
Restricted Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this Section 3.05(b)(iv).
Upon receipt by the Trustee, as Security Registrar, at its Corporate Trust
Office of (1) written instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or cause
to be credited to a specified Agent Member's account a beneficial interest
in the Restricted Global Security in a principal amount equal to that of
the beneficial interest in the Regulation S Global Security to be so
transferred, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Agent
Member to be credited with, and the account of the Agent Member (and the
Euroclear or CEDEL account, as the case may be) to be debited for, such
beneficial interest, and (3) a certificate in substantially the form set
forth in Section 2.07(c) given by the holder of such beneficial interest,
the Trustee, as Security Registrar, shall instruct the U.S. Depositary to
reduce the principal amount of the Regulation S Global Security, and to
increase the principal amount of the Restricted Global Security, by the
principal amount of the beneficial interest in the Regulation S Global
Security to be so transferred, and to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial
interest in the Restricted Global Security having a principal amount equal
to the amount by which the principal amount of the Regulation S Global
Security was reduced upon such transfer.
(v) Other Exchanges. In the event that a Global Security or any
portion thereof is exchanged for Securities other than Global Securities,
such other
<PAGE>
53
Securities may in turn be exchanged (on transfer or otherwise) for
Securities that are not Global Securities or for beneficial interests in a
Global Security (if any is then outstanding) only in accordance with such
procedures, which shall be substantially consistent with the provisions of
clauses (i) through (iv) above (including the certification requirements
intended to insure that transfers of beneficial interests in a Global
Security comply with Rule 144A, Rule 144 or Regulation S under the
Securities Act, as the case may be) and any Applicable Procedures, as may
be from time to time adopted by the Company and the Trustee.
(vi) Interests in Regulation S Global Security to be Held Through
Euroclear or CEDEL. Until the termination of the Restricted Period,
interests in the Regulation S Global Security may be held only through
Agent Members acting for and on behalf of Euroclear and CEDEL, provided
that this clause (vi) shall not prohibit any transfer in accordance with
Section 3.05(b)(iv) hereof.
(vii) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Security Registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Security Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met; provided,
however, that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
<PAGE>
54
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
3.05(b)(viii) or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth in Section 2.06); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth in
Section 2.06); or
(C) if such Definitive Securities are being transferred
pursuant to an exemption from registration in accordance with Rule
144, (i) a certification to that effect (in the form set forth in
Section 2.06) and (ii) if the Company or Security Registrar so
requests, an opinion of counsel or other evidence reasonably
satisfactory to them as to the compliance with the restrictions set
forth in the legend set forth in Section 2.02.
(viii) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a
Qualified Institutional Buyer in accordance with Rule 144A, or (B) outside
the United States in an offshore transaction within the
<PAGE>
55
meaning of Regulation S and in compliance with Rule 904 under the
Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Registrar to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Registrar to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Registrar, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so cancelled. If no
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate principal
amount.
(c) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the legend set forth in the
first and fifth paragraphs of Section 2.02. Whenever any Security is presented
or surrendered for registration of transfer or for exchange for a Security
registered in a name other than that of the Holder, such Security must be
accompanied by a certificate in substantially the form set forth in Section
2.06, dated the date of such surrender and signed by the Holder of such
Security, as to compliance with such restrictions on transfer. The Security
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
<PAGE>
56
(d) The restrictions imposed by the legend set forth in the first
paragraph of Section 2.02 upon the transferability of any Security shall cease
and terminate when such Security has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or any successor provision thereto). Any
Security as to which such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon surrender of such
Security for exchange to the Security Registrar in accordance with the
provisions of this Section 3.05 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive legend set forth in the first paragraph of Section
2.02. The Company shall inform the Trustee of the effective date of any
registration statement registering the Securities under the Securities Act. The
Trustee shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the aforementioned opinion of counsel or
registration statement.
(e) As used in the preceding two paragraphs of this Section 3.05,
the term "transfer" encompasses any sale, pledge, transfer, hypothecation or
other disposition of any Security.
(f) No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 9.06, 11.08, 13.02 or 14.05 not
involving any transfer.
(g) The Company shall not be required (i) to issue, register the
transfer of or exchange any Security
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57
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Securities selected for redemption
under Section 11.04 and ending at the close of business on the day of such
mailing, or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(h) The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in part
for a Security registered in the name of any Person other than the U.S.
Depositary or one or more nominees thereof, provided that a Global
Security may be exchanged for Securities registered in the names of any
person designated by the U.S. Depositary in the event that (i) the U.S.
Depositary has notified the Company that it is unwilling or unable to
continue as U.S. Depositary for such Global Security or such U.S.
Depositary has ceased to be a "clearing agency" registered under Exchange
Act, (ii) an Event of Default has occurred and is continuing with respect
to the Securities, or (iii) a request for certificates has been made upon
60 days' prior written notice given to the Trustee in accordance with the
U.S. Depositary's customary procedures and a copy of such notice has been
received by the Company from the Trustee. Any Global Security exchanged
pursuant to clause (i) above shall be so exchanged in whole and not in
part and any Global Security exchanged pursuant to clause (ii) or (iii)
above may be exchanged in whole or from time to time in part as directed
by the U.S. Depositary. Any Security issued in exchange for a Global
Security or any portion thereof shall be a Global Security; provided that
any such Security so issued that is registered in the name of a Person
other than the U.S. Depositary or a nominee thereof shall not be a Global
Security.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate principal amount equal
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58
to that of such Global Security or portion thereof to be so exchanged,
shall be registered in such names and be in such authorized denominations
as the U.S. Depositary shall designate and shall bear the applicable
legends provided for herein. Any Global Security to be exchanged in whole
shall be surrendered by the U.S. Depositary to the Trustee, as Security
Registrar. With regard to any Global Security to be exchanged in part,
either such Global Security shall be so surrendered for exchange or, if
the Trustee is acting as custodian for the U.S. Depositary or its nominee
with respect to such Global Security, the principal amount thereof shall
be reduced, by an amount equal to the portion thereof to be so exchanged,
by means of an appropriate adjustment made on the records of the Trustee.
Upon any such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order of the
U.S. Depositary or an authorized representative thereof. Any Security
delivered in exchange for the Restricted Global Security or any portion
thereof shall, except as otherwise provided by clause (iii) of Section
3.05(b), bear the legend regarding transfer restrictions applicable to the
Restricted Global Security set forth in the first paragraph of Section
2.02.
(3) Subject to the provisions of clause (5) below, the registered
holder may grant proxies and otherwise authorize any Person, including
Agent Members and persons that may hold interests through Agent Members,
to take any action which a holder is entitled to take under this Indenture
or the Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee
a reasonable supply of certificated Securities in definitive, fully
registered form, without interest coupons.
(5) Neither any members of, or participants in, the U.S. Depositary
("Agent Members") nor any other Persons on whose behalf Agent Members may
act (including Euroclear and CEDEL and account holders and participants
therein) shall have any rights under this
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59
Indenture with respect to any Global Security registered in the name of
the U.S. Depositary or any nominee thereof, or under any such Global
Security, and the U.S. Depositary or such nominee, as the case may be, may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, 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 U.S. Depositary or such nominee, as the
case may be, or impair, as between the U.S. Depositary, its Agent Members
and any other person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise of
the rights of a holder of any Security.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security.
Upon the issuance, authentication and delivery by the Trustee of any
new Security under this Section, the
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60
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued, authenticated and delivered by the
Trustee pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for payment of such interest.
If the Company shall be required by law to deduct any taxes from any
sum of interest payable hereunder to a Holder, (i) the Company shall make such
deductions and shall pay the full amount deducted to the relevant taxing
authority in accordance with applicable law and (ii) the amount of such
deduction shall be treated for purposes hereof as a payment of interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
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61
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause (1) provided. Thereupon, the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the
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62
proposed payment pursuant to this Clause (2), such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the corresponding Interest Payment Date, interest
on such Security whose Stated Maturity is on such Interest Payment Date shall be
deemed to continue to accrue and shall be payable on such Interest Payment Date
notwithstanding such conversion and notwithstanding that such Security may have
been called for redemption on a Redemption Date within such period, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable (although such accrued
and unpaid interest will be deemed paid by the appropriate portion of the Common
Stock received by the holders upon such conversion).
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.07) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 3.09. Cancellation. All Securities surrendered for payment,
redemption, registration of
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63
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 3.10. Computation of Interest. Interest on the Securities of
each series shall be computed on the basis of a 360-day year of twelve 30-day
months.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company request cease to be of further effect (except as to
any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.06 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in
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64
Section 10.03) have been delivered to the Trustee for cancellation;
or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited irrevocably with the Trustee as
trust funds in trust for the benefit of Holders of Outstanding
Securities in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with; and
(4) no Event of Default which, with notice or lapse of time, or
both, would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit.
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65
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions
of the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee. All moneys deposited with the Trustee
pursuant to Section 4.01 (and held by it or any Paying Agent) for the payment of
Securities subsequently converted shall be returned to the Company upon Company
Request.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
XII or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or
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66
(2) default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(4) a default under any bonds, debentures, notes or other evidences
of indebtedness for money borrowed by the Company or a Subsidiary or under
any mortgages, indentures or instruments under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or a Subsidiary, whether such indebtedness now
exists or shall hereafter be created, which indebtedness, individually or
in the aggregate, is in excess of $1.5 million principal amount, which
default shall constitute a failure to pay any portion of the principal of
such indebtedness when due and payable after the expiration of any
applicable grace or cure period with respect thereto or shall have
resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without such indebtedness having been discharged, or such acceleration
having been rescinded or annulled, within a period of 10 days after there
shall have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities a written notice
specifying such default and
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67
requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company or a Significant
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or a Significant Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or a Significant Subsidiary or of any substantial part of
their respective properties, or ordering the winding up or liquidation of
the affairs of the Company or a Significant Subsidiary, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(6) the commencement by the Company or a Significant Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either the Company or a Significant Subsidiary to the entry of
a decree or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against either the Company or a Significant Subsidiary, or the
filing by either the Company or a Significant Subsidiary
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68
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by either the Company
or a Significant Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company
or a Significant Subsidiary or of any substantial part of their respective
properties, or the making by either the Company or a Significant
Subsidiary of an assignment for the benefit of creditors, or the admission
by either the Company or a Significant Subsidiary in writing of an
inability to pay the debts of either the Company or a Significant
Subsidiary generally as they become due, or the taking of corporate action
by the Company or a Significant Subsidiary in furtherance of any such
action.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 5.01(5)
or 5.01(6)) occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
may declare the principal of all the Securities to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal shall become
immediately due and payable. If an Event of Default specified in Section 5.01(5)
or 5.01(6) occurs, the principal of all the Securities shall automatically, and
without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article V provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
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69
(1) the Company has paid or deposited with
the Trustee a sum sufficient to pay
(A) all overdue interest on all
Securities,
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee. If
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
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70
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Securities, and, in addition thereto, 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.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
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71
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official 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 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 6.07.
No provision of this Indenture 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; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article V shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal (or premium, if any) or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
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72
FIRST: Subject to Article XII to the payment of all amounts due the
Trustee under Section 6.07;
SECOND: Subject to Article XII to the payment of the amounts then
due and unpaid for first, interest on, and, second, for principal of (and
premium, if any, on) the Securities in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for interest and principal (and premium, if any) respectively;
and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, as their interest may appear or as a court of competent
jurisdiction shall direct.
SECTION 5.07. Limitation on Suits. No Holder of any Security shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
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73
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert. Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 3.07) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or Repurchase Date, as the case may be) and
to convert such Security in accordance with Article XIII and to institute suit
for the enforcement of any such payment and right to convert, and such rights
shall not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
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every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee;
provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than
a majority in principal amount of the Outstanding Securities may on behalf of
the Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
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75
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 5.14. 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, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
provided, that this Section 5.14 shall not be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company or in any suit for the enforcement of the right to convert any
Security in accordance with Article XIII.
SECTION 5.15. Waiver of Usury, Stay or Extension 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 usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) 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.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this paragraph (c) shall not be construed to
limit the effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or
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power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder, the Trustee shall give the Holders, in the
manner provided in Section 1.06, notice of any default hereunder; provided,
however, that in the case of any default of the character specified in Section
5.01(3), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions
of Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult 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;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
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SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Authenticating
Agent, any Paying Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Section 6.08 and Section 6.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and
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counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The Trustee shall notify the Company of any claim asserted against it for
which it may seek indemnity.
SECTION 6.08. Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. 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, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $25,000,000, subject to supervision or examination by federal or state
authority, in good standing and having an established place of business in the
Borough of Manhattan, The City of New York. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
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SECTION 6.10. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.11 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of
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competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 6.11, become the successor Trustee
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 6.11, any Holder who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly
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assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. 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 with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company. If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents which shall be authorized to act on
behalf of the Trustee to authenticate Securities issued upon original issue and
upon exchange, registration of transfer, partial conversion, partial redemption,
or partial repurchase or pursuant to Section 3.06, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if
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authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not
less than $25,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
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provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.07.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
-------------------------------,
As Trustee
by
------------------------,
As Authenticating Agent
by
------------------------,
Authorized Signatory
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ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
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SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission, if applicable, and with
the Company. The Company will notify the Trustee when the Securities are listed
on any stock exchange.
SECTION 7.04. Reports by Company. (a) The Company shall file with
the Trustee and the Commission, if applicable, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission. Notwithstanding anything to
the contrary contained herein, the Trustee shall have no duty to review such
documents for the purpose of determining compliance with this Indenture.
(b) The Company shall provide the Trustee with at least 30 days
prior notice of any change in location of its principal executive offices or
other principal place of business.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company or convey, trans-
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fer or lease its properties and assets substantially as an
entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if
any) and interest on all the Securities and the performance or observance
of every covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for conversion rights in
accordance with Article XIII;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 8.02. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer or lease
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of the properties and assets of the Company substantially as an entirety in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be released from its
obligations and covenants under this Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the equal and ratable
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Company's obligations in respect of the
Securities; or
(4) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, to
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correct or supplement any provision herein which limits, qualifies or
conflicts with a provision of the Trust Indenture Act which is required
under such Act to be a part of and govern this Indenture, in any case to
the extent necessary to qualify this Indenture under the Trust Indenture
Act, or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with the
provisions of this Indenture; provided that such action pursuant to this
Clause (5) shall not adversely affect the interests or legal rights of the
Holders in any material respect.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities, by the Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repurchase, on or after the Redemption Date or Repurchase
Date, as the case may be), or adversely affect the right to convert any
Security as provided in Article XIII (except as permitted by Section
9.01(4)), or modify the provisions of this Indenture with respect to the
subordination of the
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Securities in a manner adverse to the Holders, or modify the redemption
provisions in a manner adverse to the Holders, or modify the provisions
relating to the Company's requirement to offer to repurchase Notes upon a
Change in Control in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York pursuant to
Section 10.02, or
(4) modify any of the provisions of this Section 9.02, Section 5.13
or Section 10.08, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(5) modify any of the provisions of Section 10.09.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 and Section 6.03) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The
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Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 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 supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the judgment of the Trustee and the Company, to
any such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest. The
Company will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York an office or agency
where Securities may be
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presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Company 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 10.03. Money for Security Payments To Be Held in Trust. If
the Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of (and premium, if any) or interest on any of
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest,
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and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 10.03,
that such Paying Agent will
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall
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thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.04. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 10.05. Existence. Subject to Article VIII, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve 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 that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 10.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will
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cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposition is, in the judgment of the Company, desirable in
the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 10.07. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 10.08. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any covenant or condition set forth in
Sections 10.05 to 10.07, inclusive, if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Securities
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
SECTION 10.09. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or
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the holder of shares of Common Stock issued upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or such holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such security. "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Right of Redemption. The Securities may be redeemed
at the election of the Company, as a whole or from time to time in part, at any
time on or after November 24, 1999, at the Redemption Prices specified in the
form of Security hereinbefore set forth, together with accrued interest to the
Redemption Date.
SECTION 11.02. Applicability of Article. Redemption of Securities at
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article XI.
SECTION 11.03. Election To Redeem; Notice to Trustee. The election
of the Company to redeem any Securities pursuant to Section 11.01 shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed.
SECTION 11.04. Selection by Trustee of Securities To Be Redeemed. If
less than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be
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selected not less than 30 days or more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate in the
circumstances and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Security
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 all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.05. 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 his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be redeemed,
the identification
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(and, in the case of partial redemption of any Securities, the
principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(5) the conversion price, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where
such Securities may be surrendered for conversion, and
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
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 request, by the
Trustee in the name and at the expense of the Company, and shall be irrevocable.
SECTION 11.06. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date other than any Securities called for redemption on that date which
have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.07) be paid to the Company upon
Company Request or, if then held by the Company, shall be released from such
trust.
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SECTION 11.07. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear or accrue any interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to (but not including) the Redemption Date; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear and accrue interest from the Redemption Date at the rate borne
by the Security.
SECTION 11.08. Securities Redeemed in Part. Any Security which is to
be redeemed only in part shall be surrendered at an office or agency of the
Company designated for that purpose pursuant to Section 10.02 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney-in-fact duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
amount of the Security so surrendered.
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ARTICLE XII
Subordination of Securities
SECTION 12.01. Securities Subordinate to Senior Indebtedness. The
Company covenants and agrees, and each Holder of a Security, by his acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article XII, the indebtedness represented by the
Securities and the payment of the principal of (and premium, if any) and
interest on each and all of the Securities and all obligations of the Company
under this Indenture are hereby expressly made subordinate and junior in right
of payment to the prior payment in full of all Senior Indebtedness and that said
subordination is for the benefit of the holders of Senior Indebtedness and they
and or each of them severally may enforce such subordination.
SECTION 12.02. Payment Over of Proceeds upon Dissolution, Etc. In
the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders of the Securities are entitled to receive any
payment on account of principal of (or premium, if any) or interest on the
Securities, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, which may be
payable or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up or event.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, and if such fact shall, at or prior to
the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article XII only, the words "cash, property or
securities" shall not be deemed to include shares of capital stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which in
either case are subordinated in right of payment to all Senior Indebtedness
which may at the time be outstanding to substantially the same extent as, or to
a greater extent than, the Securities are so subordinated as provided in this
Article XII. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
VIII shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section 12.02 if the Person formed by
such consolidation or into which the Company is merged or which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article VIII.
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SECTION 12.03. No Payment When Senior Indebtedness in Default. (a)
In the event and during the continuation of any default in the payment of
principal of (or premium, if any) or interest on any Senior Indebtedness beyond
any applicable grace period with respect thereto (unless and until such payment
default shall have been cured or waived in writing by the holders of such Senior
Indebtedness), or (b) in the event any judicial proceeding shall be pending with
respect to any such default, then no payment shall be made by the Company on
account of principal of (or premium, if any) or interest on the Securities or on
account of the purchase or other acquisition of Securities (including pursuant
to Articles XI and XIII).
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 12.03, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section 12.03 shall not apply to any payment
with respect to which Section 12.02 would be applicable.
SECTION 12.04. Payment Permitted If No Default. Nothing contained in
this Article XII or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 12.02 or under the conditions described in
Section 12.03, from making payments at any time of principal of (and premium, if
any) or interest on the Securities, or (b) the application by the Trustee of any
money deposited with it hereunder to the payment of or on account of the
principal of (and premium, if any) or interest on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article XII.
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SECTION 12.05. Subrogation to Rights of Holders of Senior
Indebtedness. Subject to the payment in full of all Senior Indebtedness, and
until the Securities are paid in full, the Holders of the Securities shall be
subrogated (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Securities are subordinated and
is entitled to like rights of subrogation) to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness to the extent that payments and
distributions otherwise payable to Holders of Securities have been applied to
the payment of Senior Indebtedness as provided by this Article XII. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled, except for the provisions of this
Article XII, and no payments over pursuant to the provisions of this Article XII
to the holders of Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
SECTION 12.06. Provisions Solely To Define Relative Rights. The
provisions of this Article XII 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 Senior Indebtedness on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article XII of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of (and premium, if any) and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
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Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XII of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 12.07. Trustee To Effectuate Subordination. Each holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XII and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 12.08. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided 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 non-compliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the holders
of Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; (iv) exercise or
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refrain from exercising any rights against the Company and any other Person; (v)
apply any and all sums received from time to time to the Senior Indebtedness.
SECTION 12.09. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 6.01, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 12.09 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
Subject to the provisions of Section 6.01, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which
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such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article XII, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 12.10. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of
Section 6.01, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
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 thereon and all other facts pertinent thereto or to this Article
XII.
SECTION 12.11. Trustee Not Fiduciary for 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 if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
XII or otherwise.
SECTION 12.12. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article XII with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness,
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and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Nothing in this Article XII shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.07.
SECTION 12.13. Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
XII shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article XII in
addition to or in place of the Trustee; provided, however, that Section 12.12
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
SECTION 12.14. Certain Conversions Deemed Payment. For the purposes
of this Article XII only, (1) the issuance and delivery of junior securities
upon conversion of Securities in accordance with Article XIII shall not be
deemed to constitute a payment or distribution on account of the principal of or
premium or interest on Securities or on account of the purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of cash,
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section 12.14, the term "junior
securities" means (a) shares of any stock of any class of the Company and (b)
securities of the Company which are subordinated in right of payment to the
prior payment in full of all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Securities are so subordinated as provided
in this Article XII. Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of the Securities, the right, which is absolute and unconditional,
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of the Holder of any Security to convert such Security in accordance with
Article XIII.
ARTICLE XIII
Conversion of Securities
SECTION 13.01. Conversion Privilege and Conversion Price. Subject to
and upon compliance with the provisions of this Article XIII, at the option of
the Holder thereof, any Security or any portion of the principal amount thereof
which is $1,000 or an integral multiple of $1,000 may be converted at the
principal amount thereof, or of such portion thereof, into fully paid and
nonassessable shares of Common Stock of the Company (in the form of a Domestic
Share Certificate or a Foreign Share Certificate, as applicable) at any time
after 60 days following the date of original issuance of Securities at the
conversion price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on the
Business Day immediately preceding November 15, 2006. In case a Security or
portion thereof is called for redemption, such conversion right in respect of
the Security or portion so called shall expire at the close of business on the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
No Holder of a Security will be entitled to convert such Security,
or a portion thereof, if such Holder is a Foreigner or holding for the account
of a Foreigner and the conversion will, in the good faith judgment of the
Company, increase the aggregate ownership by Foreigners above the then Permitted
Percentage.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $66.00 per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in Section 13.04.
In case the Company shall, by dividend or otherwise, declare or make
a distribution on its Common Stock referred to in paragraph (4) or (5) of
Section 13.04
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(including, without limitation, dividends or distributions referred to in the
last sentence of paragraph (4) of Section 13.04), the Holder of each Security,
upon the conversion thereof pursuant to this Article XIII subsequent to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution and prior to the effectiveness of the
conversion price adjustment in respect of such distribution pursuant to
paragraph (4) or (5) of Section 13.04, shall also be entitled to receive for
each share of Common Stock into which such Security is converted, the portion of
the evidences of indebtedness, shares of capital stock, securities, cash and
assets so distributed applicable to one share of Common Stock, provided that, at
the election of the Company (whose election shall be evidenced by a Board
Resolution) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution). If any conversion of a Security described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of the Security so converted is
entitled to receive in accordance with the immediately preceding sentence, the
Company may elect (such election to be evidenced by a Board Resolution) to
distribute to such Holder a due bill for the evidences of indebtedness, shares
of capital stock, securities, cash or assets to which such Holder is so
entitled, provided that such due bill (i) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (ii) requires payment or delivery of such evidences of
indebtedness, shares of capital stock, securities, cash or assets no later than
the date of payment or delivery thereof to holders of Common Stock receiving
such distribution.
SECTION 13.02. Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the Holder of any Security to be converted
shall surrender such Security, duly endorsed or assigned to the Company or in
blank, at any office or agency maintained by the Company pursuant to Section
10.02, accompanied by (a) written notice (as set
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forth in Section 2.05 herein) to the Company at such office or agency that the
Holder elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted and (b)
if shares or any portion of such Security not to be converted are to be issued
in the name of a Person other than the Holder thereof, and the restrictions on
transfer of such Security set forth in the first paragraph of Section 2.02
remain in effect, a certification of the Holder as to compliance with such
restrictions (as set forth in Section 2.06).
If the restrictions on transfer of a Security set forth in the first
paragraph of Section 2.02 remain in effect, all shares of Common Stock delivered
upon conversion thereof shall bear a restrictive legend substantially in the
form of such paragraph.
Except as described in the last paragraph of Section 3.07, no Holder
of Securities will be entitled upon conversion thereof to any payment or
adjustment on account of accrued and unpaid interest thereon (although such
accrued and unpaid interest will be deemed paid by the appropriate portion of
the Common Stock received by the holders upon such conversion) or on account of
dividends on the shares of Common Stock issued in connection therewith.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date (except Securities called for redemption on
a Redemption Date within such period between and including such Regular Record
Date and such Interest Payment Date) must be accompanied by payment to the
Company in New York Clearing House Funds or other funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount converted.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common
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Stock at such time. As promptly as practicable on or after the conversion date,
the Company shall issue and shall deliver at such office or agency a certificate
or certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as provided
in Section 13.03.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 13.03. Fractions of Shares. No fractional shares of Common
Stock shall be issued upon conversion of Securities. If more than one Security
shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issuable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional share of Common
Stock which would otherwise be issuable upon conversion of any Security or
Securities (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Closing Price per share of the Common Stock at the close of business on
the day of conversion (or, if such day is not a Trading Day, on the Trading Day
immediately preceding such day).
SECTION 13.04. Adjustment of Conversion Price. (1) In case the
Company shall pay or make a dividend or other distribution on its Common Stock
exclusively in Common Stock or shall pay or make a dividend or other
distribution on any other class of capital stock of the Company which dividend
or distribution includes Common Stock, the conversion price in effect at the
opening of business on the day next following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
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denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day next
following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights, warrants or options entitling
the holders thereof to subscribe for or purchase shares of Common Stock at a
price per share less than the current market price per share (determined as
provided in paragraph (7) of this Section 13.04) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such rights,
warrants or options, the conversion price in effect at the opening of business
on the day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
shall not issue any
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rights, warrants or options in respect of shares of Common Stock held in the
treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) Subject to the last sentence of this paragraph (4), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness, shares of any class of capital stock,
securities, cash or property (excluding any rights, warrants or options referred
to in paragraph (2) of this Section 13.04, any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in paragraph
(1) of this Section 13.04), the conversion price shall be reduced so that the
same shall equal the price determined by multiplying the conversion price in
effect immediately prior to the effectiveness of the conversion price reduction
contemplated by this paragraph (4) by a fraction of which the numerator shall be
the current market price per share (determined as provided in paragraph (7) of
this Section) of the Common Stock on the date of such effectiveness less the
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution and shall,
in the case of securities being distributed for which prior thereto there is an
actual or when issued trading market, be no less than the value determined by
reference to the average of the closing prices in such market over the period
specified in the succeeding sentence), on the date of such effectiveness, of the
portion of the evidences of indebtedness, shares of capital stock, securities,
cash and property so distributed applicable to
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one share of Common Stock and the denominator shall be such current market price
per share of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day next following the later of (a) the
date fixed for the payment of such distribution and (b) the date 20 days after
the notice relating to such distribution is given pursuant to Section 13.06(a)
(such later date of (a) and (b) being referred to as the "Reference Date"). If
the Board of Directors determines the fair market value of any distribution for
purposes of this paragraph (4) by reference to the actual or when issued trading
market for any securities comprising such distribution, it must in doing so
consider the prices in such market over the same period used in computing the
current market price per share pursuant to paragraph (7) of this Section. For
purposes of this paragraph (4), any dividend or distribution that includes
shares of Common Stock or rights, warrants or options to subscribe for or
purchase shares of Common Stock shall be deemed instead to be (a) a dividend or
distribution of the evidences of indebtedness, cash, property, shares of capital
stock or securities other than such shares of Common Stock or such rights,
warrants or options (making any conversion price reduction required by this
paragraph (4)) immediately followed by (b) a dividend or distribution of such
shares of Common Stock or such rights, warrants or options (making any further
conversion price reduction required by paragraph (1) or (2) of this Section
13.04, except (i) the Reference Date of such dividend or distribution as defined
in this paragraph (4) shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "the date fixed for the determination of stockholders entitled to
receive such rights, warrants or options" and "the date fixed for such
determination" within the meaning of paragraphs (1) and (2) of this Section
13.04 and (ii) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of paragraph (1) of this
Section 13.04).
(5) In case the Company shall, by dividend or otherwise, make a
distribution to all holders of its Common Stock exclusively in cash in an
aggregate amount that, together with (i) the aggregate amount of any other
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distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no conversion price adjustment pursuant to this paragraph (5) has been
made and (ii) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of the
tender or exchange offer referred to below, of consideration payable in respect
of any tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no conversion price
adjustment pursuant to paragraph (6) of this Section 13.04 has been made,
exceeds 12.5% of the product of the current market price per share (determined
as provided in paragraph (7) of this Section 13.04) of the Common Stock on the
date fixed for stockholders entitled to receive such distribution times the
number of shares of Common Stock outstanding on such date, the conversion price
shall be reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this paragraph
(5) by a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph (7) of this Section 13.04) of the
Common Stock on the date of such effectiveness less the amount of cash so
distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the later of
(a) the day following the date fixed for the payment of such distribution and
(b) the date 20 days after the notice relating to such distribution is given
pursuant to Section 13.06(a).
(6) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer shall involve an aggregate consideration having a fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant
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to such tender or exchange offer (as it may be amended) that, together with (i)
the aggregate of the cash plus the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of the other tender or
exchange offer referred to below, of consideration payable in respect of any
other tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the preceding 12 months and in
respect of which no conversion price adjustment pursuant to this paragraph (6)
has been made and (ii) the aggregate amount of any distributions to all holders
of the Common Stock made exclusively in cash within the preceding 12 months and
in respect of which no conversion price adjustment pursuant to paragraph (5) of
this Section 13.04 has been made, exceeds 12.5% of the product of the current
market price per share (determined as provided in paragraph (7) of this Section
13.04) of the Common Stock on the Expiration Time times the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time,
the conversion price shall be reduced (but not increased) so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (i) the product of the current market price per share (determined as
provided in paragraph (7) of this Section 13.04) of the Common Stock at the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time minus (ii)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and the denominator shall be the product of (i) such current market price per
share at the Expiration Time times (ii) such number of outstanding shares at the
Expiration Time less the number of Purchased Shares, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
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(7) For the purpose of any computation under this paragraph and
paragraphs (2), (4) and (5) of this Section 13.04, the current market price per
share of Common Stock on any date in question shall be deemed to be the average
of the daily Closing Prices for the 5 consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not later
than, the date in question; provided, however, that (i) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the conversion price
pursuant to paragraph (1), (2), (3), (4), (5) or (6) above ("Other Event")
occurs on or after the 20th Trading Day prior to the date in question and prior
to the "ex" date for the issuance or distribution requiring such computation
(the "Current Event"), the Closing Price for each Trading Day prior to the "ex"
date for such Other Event shall be adjusted by multiplying such Closing Price by
the same fraction by which the conversion price is so required to be adjusted as
a result of such Other Event, (ii) if the "ex" date for any Other Event occurs
after the "ex" date for the Current Event and on or prior to the date in
question, the Closing Price for each Trading Day on and after the "ex" date for
such Other Event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the conversion price is so required to be
adjusted as a result of such Other Event, (iii) if the "ex" date for any Other
Event occurs on the "ex" date for the Current Event, one of those events shall
be deemed for purposes of clauses (i) and (ii) of this proviso to have an "ex"
date occurring prior to the "ex" date for the other event, and (iv) if the "ex"
date for the Current Event is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (ii) of this proviso,
the Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value on
the date in question (as determined in good faith by the Board of Directors in a
manner consistent with any determination of such value for purposes of paragraph
(4) or (5) of this Section 13.04, whose determination shall be conclusive and
described in a Board Resolution) of the portion of the rights, warrants,
options, evidences of indebtedness, shares of capital stock, securities, cash or
property being distributed applicable to one share of Common Stock. For the
purpose of any computation under
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paragraph (6) of this Section 13.04, the current market price per share of
Common Stock on any date in question shall be deemed to be the average of the
daily Closing Prices for the 5 consecutive Trading Days selected by the Company
commencing on or after the latest (the "Commencement Date") of (i) the date 20
Trading Days before the date in question, (ii) the date of commencement of the
tender or exchange offer requiring such computation and (iii) the date of the
last amendment, if any, of such tender or exchange offer involving a change in
the maximum number of shares for which tenders are sought or a change in the
consideration offered, and ending not later than the date of the Expiration Time
of such tender or exchange offer (or, if such Expiration Time occurs before the
close of trading on a Trading Day, not later than the Trading Day immediately
preceding the date of such Expiration Time); provided, however, that if the "ex"
date for any Other Event (other than the tender or exchange offer requiring such
computation) occurs on or after the Commencement Date and on or prior to the
date of the Expiration Time for the tender or exchange offer requiring such
computation, the Closing Price for each Trading Day prior to the "ex" date for
such Other Event shall be adjusted by multiplying such Closing Price by the same
fraction by which the conversion price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex" date, (i)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (ii) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(iii) when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time of such tender or exchange offer.
(8) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this
Section, as it considers to be advisable in order that any event treated
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for Federal income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipients.
(9) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this paragraph (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
SECTION 13.05. Notice of Adjustments of Conversion Price. Whenever
the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 13.04 and shall prepare a certificate signed by
the Treasurer of the Company setting forth the adjusted conversion price
and showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed (with a copy to the
Trustee) at each office or agency maintained for the purpose of conversion
of Securities pursuant to Section 10.02; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Security Register.
SECTION 13.06. Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require a conversion price
adjustment pursuant to paragraph (5) of Section 13.04; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, warrants or
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options to subscribe for or purchase any shares of capital stock of
any class or of any other rights (excluding employee stock options); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall commence a
tender or exchange offer for all or a portion of the Company's outstanding
shares of Common Stock (or shall amend any such tender or exchange offer);
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.02, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record, effective or expiration
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or granting of
rights, warrants or options, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights, warrants or options are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender offer commenced, the date on which such tender offer is scheduled to
expire unless extended, the consideration
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offered and the other material terms thereof (or the material terms of any
amendment thereto).
SECTION 13.07. Company to Reserve Common Stock. The Company shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of effecting the
conversion of Securities, the whole number of shares of Common Stock then
issuable upon the conversion in full of all outstanding Securities.
SECTION 13.08. Taxes on Conversions. The Company will pay any and
all taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
SECTION 13.09. Covenant as to Common Stock. The Company covenants
that all shares of Common Stock which may be issued upon conversion of
Securities will upon issue be newly issued (and not treasury shares) and be duly
authorized, validly issued, fully paid and nonassessable and, except as provided
in Section 13.08, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
SECTION 13.10. Cancellation of Converted Securities. All Securities
delivered for conversion shall be delivered to the Trustee to be cancelled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 3.09.
SECTION 13.11. Provisions in Case of Reclassification,
Consolidation, Merger or Sale of Assets. In the event that the Company shall be
a party to any transaction (including without limitation any (i)
recapitalization or reclassification of the Common Stock (other than a change in
par value, or from par value to no par value, or from no par
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123
value to par value, or as a result of a subdivision or combination of the Common
Stock), (ii) any consolidation of the Company with, or merger of the Company
into, any other person, any merger of another person into the Company (other
than a merger which does not result in a reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock of the Company), (iii) any
sale or transfer of all or substantially all of the assets of the Company, or
(iv) any compulsory share exchange) pursuant to which the Common Stock is
converted into the right to receive other securities, cash or other property,
then lawful provision shall be made as part of the terms of such transaction
whereby the Holder of each Security then outstanding shall have the right
thereafter to convert such Security only into (subject to funds being legally
available for such purpose under applicable law at the time of such conversion)
the kind and amount of securities, cash and other property receivable upon such
transaction by a holder of the number of shares of Common Stock into which such
Security might have been converted immediately prior to such transaction. The
Company or the person formed by such consolidation or resulting from such merger
or which acquired such assets or which acquired the Company's shares, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
establishing such rights. Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The above provisions of this
Section 13.11 shall similarly apply to successive transactions of the foregoing
type.
ARTICLE XIV
Right to Require Repurchase
SECTION 14.01. Right to Require Repurchase. In the event that there
shall occur a Change in Control (as defined in Section 14.06), then each Holder
shall have the right, at such Holder's option, to require the Company, subject
to the provisions of Section 12.03, to purchase all or any designated part of
such Holder's Securities on the date (the "Repurchase Date") that is 75 days
after the date the Company gives notice of the Change in Control as
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contemplated in Section 14.02(a) at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
through the Repurchase Date. Such right to require the repurchase of Securities
shall not continue after a discharge of the Company from its obligations with
respect to the Securities in accordance with Article IV.
SECTION 14.02. Notice; Method of Exercising Repurchase Right. (a) On
or before the 15th day after the Company knows or reasonably should know a
Change in Control has occurred, the Company, or at the request of the Company,
the Trustee (in the name and at the expense of the Company), shall give notice
of the occurrence of the Change in Control and of the repurchase right set forth
herein arising as a result thereof by first-class mail, postage prepaid, to each
Holder of the Securities at such Holder's address appearing in the Security
Register. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right
must be exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to
exercise its repurchase right.
No failure of the Company to give the foregoing notice shall limit
any Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change in
Control.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the 10th day prior to
the Repurchase Date (i) written notice of the Holder's exercise of such right,
which notice shall set forth the
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name of the Holder, the principal amount of the Security or Securities (or
portion of a Security) to be repurchased, and a statement that an election to
exercise the repurchase right is being made thereby, and (ii) the Security or
Securities with respect to which the repurchase right is being exercised, duly
endorsed for transfer to the Company. Such written notice shall be irrevocable.
If the Repurchase Date falls between any Regular Record Date and the
corresponding succeeding Interest Payment Date, Securities to be repurchased
must be accompanied by payment from the Holder of an amount equal to the
interest thereon which the registered Holder thereof is to receive on such
Interest Payment Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall on the Repurchase Date pay or cause to
be paid in cash to the Holder thereof the Repurchase Price of the Security or
Securities as to which the repurchase right had been exercised.
SECTION 14.03. Deposit of Repurchase Price. On or prior to the
Repurchase Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.03) an amount of money sufficient to pay the
Repurchase Price of the Securities which are to be repaid on the Repurchase
Date.
SECTION 14.04. Securities Not Repurchased on Repurchase Date. If any
Security surrendered for repurchase shall not be so paid on the Repurchase Date,
the principal of such Security shall, until paid, bear interest from the
Repurchase Date at a rate borne by such Security.
SECTION 14.05. Securities Repurchased in Part. Any Security which is
to be repurchased only in part shall be surrendered at any office or agency of
the Company designated for that purpose pursuant to Section 10.02 (with, if the
Company or the Trustee so requires, due endorsement by, or written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service
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126
charge, a new Security or Securities of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 14.06. Certain Definitions. For purposes of this Article:
The term "Beneficial Owner" shall be determined in accordance with Rules 13d-3
and 13d-5 promulgated by the Commission under the Exchange Act, or any successor
provision thereto, except that a Person shall be deemed to have "beneficial
ownership" of all shares that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time.
A "Change in Control" shall be deemed to have occurred at such time
as (a) any Person, or any Persons acting together in a manner which would
constitute a "group" (a "Group") for purposes of Section 13(d) of the Exchange
Act, or any successor provision thereto, together with any Affiliates thereof,
(i) become the Beneficial Owners, directly or indirectly, of capital stock of
the Company, entitling such Person or Persons and its or their Affiliates to
exercise more than 50% of the total voting power of all classes of the Company's
capital stock entitled to vote generally in the election of directors or (ii)
shall succeed in having sufficient of its or their nominees who are not
supported by a majority of the then current Board of Directors of the Company
elected to the Board of Directors of the Company such that such nominees, when
added to any existing directors remaining on the Board of Directors of the
Company after such election who are Affiliates of or acting in concert with any
such Persons, shall constitute a majority of the Board of Directors of the
Company, (b) the Company shall be a party to any transaction pursuant to which
the Common Stock is converted into the right to receive other securities (other
than common stock), cash and/or property (or the Company, by dividend, tender or
exchange offer or otherwise, distributes other securities, cash and/or property
to holders of Common Stock) and the value of all such securities, cash and/or
property distributed in such transaction and any other transaction effected
within the 12 months preceding consummation of such transaction (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and
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127
described in a Board Resolution) is more than 50% of the average of the daily
Closing Prices for the five consecutive Trading Days ending on the Trading Day
immediately preceding the date of such transaction (or, if earlier, the Trading
Day immediately preceding the "ex" date (as defined in paragraph (7) of Section
13.04) for such transaction) or (c) the Company shall consolidate with or merge
into any other Person or sell, convey, transfer or lease its properties and
assets substantially as an entirety to any Person other than a Subsidiary, or
any other Person shall consolidate with or merge into the Company (other than,
in the case of this clause (c), pursuant to any consolidation or merger where
Persons who are stockholders of the Company immediately prior thereto become the
Beneficial Owners of shares of capital stock of the surviving company entitling
such Persons to exercise more than 50% of the total voting power of all classes
of such surviving company's capital stock entitled to vote generally in the
election of directors).
ARTICLE XV
Defeasance and Covenant Defeasance
SECTION 15.01. Company's Option To Effect Defeasance or Covenant
Defeasance. The Company may at its option by Board Resolution, at any time,
elect to have either Section 15.02 or Section 15.03 applied to the Outstanding
Securities upon compliance with the conditions set forth below in this Article
XV.
SECTION 15.02. Defeasance and Discharge. Upon the Company's exercise
of the option provided in Section 15.01 applicable to this Section, the Company
shall be deemed to have been discharged from its obligations with respect to the
Outstanding Securities (other than those specified below), and the provisions of
Article XII hereof shall cease to be effective, on the date the conditions set
forth below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Outstanding Securities and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are
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128
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 15.04 and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any and interest on such Securities when such
payments are due, (B) the Company's obligations with respect to such Securities
under Sections 3.04, 3.05, 3.06, 10.02, 10.03, Article XIII and Article XIV, (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
(D) this Article XV. Subject to compliance with this Article XV, the Company may
exercise its option under this Section 1502 notwithstanding the prior exercise
of its option under Section 15.03.
SECTION 15.03. Covenant Defeasance. Upon the Company's exercise of
the option provided in Section 15.01 applicable to this Section, (i) the Company
shall be released from its obligations under Section 10.06 and Section 10.07,
(ii) the occurrence of an event specified in Section 5.01(3) (with respect to
either of Section 10.06 or Section 10.07) and 5.01(4) shall not be deemed to be
an Event of Default and (iii) the provisions of Article XII hereof shall cease
to be effective on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant
defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or Article, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in
any such Section or Article to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
SECTION 15.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 15.02 or
Section 15.03 to the then Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another
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129
trustee satisfying the requirements of Section 6.09 who shall agree to
comply with the provisions of this Article XV applicable to it) 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 such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money
in an amount, or (C) a combination thereof, sufficient, in the written
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of, premium, if
any, and each instalment of interest on the Securities on the Stated
Maturity of such principal or instalment of interest in accordance with
the terms of this Indenture and of such Securities. For this purpose,
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such U.S. Government Obligation or a
specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment
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130
of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
(2) In the case of an election under Section 1502, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred.
(3) In the case of an election under Section 15.03, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities will not recognize gain or
loss for Federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been the
case if such deposit and covenant defeasance had not occurred.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Securities, if then listed on any
securities exchange, will not be delisted as a result of such deposit.
(5) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 6.08 and for
purposes of the Trust Indenture Act with respect to any securities of the
Company.
(6) At the time of such deposit: (A) no default in the payment of
all or a portion of principal of (or premium, if any) or interest on or
other obligations in respect of any Senior Indebtedness shall have
occurred
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131
and be continuing, and no event of default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall have resulted
in such Senior Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable
and (B) no other event with respect to any Senior Indebtedness shall have
occurred and be continuing permitting (after notice or the lapse of time,
or both) the holders of such Senior Indebtedness (or a trustee on behalf
of the holders thereof) to declare such Senior Indebtedness due and
payable prior to the date on which it would otherwise have become due and
payable, or, in the case of either Clause (A) or Clause (B) above, each
such default or event of default shall have been cured or waived or shall
have ceased to exist.
(7) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections 5.01(5)
and (6) are concerned, at any time during the period ending on the 121st
day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(8) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
15.02 or the covenant defeasance under Section 15.03 (as the case may be)
have been complied with.
(10) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, as amended, or such trust
shall be qualified under such act or exempt from regulation thereunder.
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132
SECTION 15.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 10.03, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee-- collectively, for purposes of this Section 15.05, the "Trustee")
pursuant to Section 15.04 in respect of the Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal, premium, if any, and interest. Money so held in
trust shall not be subject to the provisions of Article XII.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 15.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article XV to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 15.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 15.06. Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 15.02 or 15.03 by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XV until
such
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133
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 15.02 or 15.03; provided, however, that if the Company
makes any payment of principal of, premium, if any, or interest on any Security
following 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 held by the Trustee or the Paying Agent.
ARTICLE XVI
Immunity
SECTION 16.01. Personal Immunity of Incorporators, Stockholders,
Directors and Officers. No recourse for the payment of the principal of or
interest on the Securities, and no recourse under or upon any obligation,
covenant or agreement contained in this Indenture or in any indenture
supplemental hereto, or in the Securities, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, or against any past,
present or future stockholder, officer or director, as such, of the Company or
any successor corporation, either directly or through the Company or any
successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities. Each and every Holder of the
Securities, by receiving and holding the same, agrees to the provisions of this
Section 16.01 and waives and releases any and all such recourse, claim and
liability.
--------------------
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134
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SEACOR HOLDINGS, INC.,
by /s/ Randall Blank
--------------------
Name: Randall Blank
Title:Executive Vice President,
Chief Financial Officer and
Secretary
Attest:
by /s/ Clifford E. Neimeth
--------------------------
Name: Clifford E. Neimeth
FIRST TRUST NATIONAL
ASSOCIATION,
by /s/ Kathe Barrett
--------------------
Name: Kathe Barrett
Title: Trust Officer
Attest:
by /s/ Richard H. Prokosch
--------------------------
Name: Richard H. Prokosch
<PAGE>
135
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 5th day of November, 1996, before me personally came Randall Blank,
to me known, who, being by me duly sworn, did depose and say that he is the
Executive VP, Chief Financial Officer and Secretary of Seacor Holdings Inc., one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she signed his name thereto by
like authority.
/s/ Linda Jean Martin
-------------------------
Linda Jean Martin
Notary Public, State of New York
No. 31-4839891
Qualified in New York County
Commission Expires 10-31-98
STATE OF MINNESOTA )
) ss.:
COUNTY OF RAMSEY )
On the 5th day of November, 1996, before me personally came Kathe Barrett,
to me known, who, being by me duly sworn, did depose and say that she is Trust
Officer of First Trust National Association, one of the corporations described
in and which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that she signed her name thereto by like authority.
/s/ Arlene W. Kosek
------------------------------
[seal] Arlene W. Kosek
Notary Public-Minnesota
Hennepin County
My Commission expires Jan. 31, 2000
$150,000,000
SEACOR HOLDINGS, INC.
5 3/8% CONVERTIBLE SUBORDINATED NOTES DUE NOVEMBER 15, 2006
REGISTRATION RIGHTS AGREEMENT
-----------------------------
November 5, 1996
CS First Boston Corporation
Salomon Brothers Inc
Wasserstein Perella Securities, Inc.
c/o CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Ladies and Gentlemen:
SEACOR Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to CS First Boston Corporation, Salomon Brothers Inc
and Wasserstein Perella Securities, Inc. (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), $150,000,000 aggregate principal amount
(plus an additional $22,500,00 principal amount to cover over-allotments, if
any) of 5 3/8% Convertible Subordinated Notes Due November 15, 2006 (the
"Notes") of the Company. The Notes will be convertible into shares of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock") at the
conversion price set forth in the Offering Circular dated October 30, 1996. The
Notes will be issued pursuant to an Indenture, dated as of November 1, 1996 (the
"Indenture"), between the Company and First Trust National Association (the
"Trustee"). As an inducement to the Initial Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the Initial Purchasers'
obligations thereunder, the Company agrees with the Initial Purchasers, (i) for
the benefit of the Initial Purchasers and (ii) for the benefit of the holders of
the Notes and the Common Stock issuable upon conversion of the Notes
(collectively, the "Securities") from time to time until such time as such
Securities have been sold pursuant to a Shelf Registration Statement (as
<PAGE>
defined below) (each of the foregoing a "Holder" and together the "Holders"), as
follows:
1. Shelf Registration. The Company shall take the following actions:
(a) The Company shall, at its cost, prepare and, as promptly as
practicable file with the Securities and Exchange Commission (the "Commission")
and thereafter shall use its best efforts to cause to be declared effective as
soon as practicable a registration statement on Form S-3 (the "Shelf
Registration Statement") covering the offer and sale of the Transfer Restricted
Securities (as defined in Section 5 hereof) by the Holders thereof from time to
time in accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act of 1933, as amended
(the "Securities Act") (hereinafter, the "Shelf Registration"); provided,
however, that no Holder (other than an Initial Purchaser) shall be entitled to
have the Securities held by it covered by such Shelf Registration Statement
unless such Holder agrees in writing to be bound by all the provisions of this
Agreement applicable to such Holder.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective, in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the relevant
Securities, until such time as all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto or may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor rule thereof),
assuming for this purpose that the Holders thereof are not affiliates of the
Company (in any such case, such period being called the "Shelf Registration
Period"). The Company shall be deemed not to have used its best efforts to keep
the Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Securities covered
thereby not being able to offer and sell such Securities during that period,
unless (i) such action is required by applicable law or (ii) upon the occurrence
of any event contemplated by paragraph 2(b)(v) below, such action is taken by
the Company in good faith and for valid business reasons and the Company
thereafter promptly complies with the requirements of paragraph 2(h) below if
the Company has determined in good faith that there are no material legal or
commercial impediments in so doing.
2
<PAGE>
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause (other than information required to be
supplied by the selling Holders pursuant to this Agreement) (i) the Shelf
Registration Statement and the related prospectus and any amendment or
supplement thereto to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (ii) the Shelf Registration Statement and any amendment
thereto not to contain, when it becomes effective, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming a part of the Shelf Registration Statement, and any amendment or
supplement to such prospectus, not to contain, as of the date of such prospectus
or amendment or supplement, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
2. Registration Procedures. In connection with the Shelf
Registration contemplated by Section 1 hereof the following provisions shall
apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior
to the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each amendment or supplement, if any,
to the prospectus included therein and, in the event that an Initial Purchaser
(with respect to any portion of an unsold allotment from the original offering)
is participating in the Shelf Registration Statement, shall use its best efforts
to reflect in each such document, when so filed with the Commission, such
comments as such Initial Purchaser reasonably may propose and (ii) include the
names of the Holders, who propose to sell Securities pursuant to the Shelf
Registration Statement, as selling security holders.
(b) The Company shall give written notice to the Initial Purchasers
and the Holders (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the prospectus until the
requisite changes have been made):
(i) when the Shelf Registration Statement or any amendment thereto
has been filed with the Commission
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and when the Shelf Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements
to the Shelf Registration Statement or the prospectus included therein or
for additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to make
changes in the Shelf Registration Statement or the prospectus in order
that the Shelf Registration Statement or the prospectus do not contain an
untrue statement of a material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the prospectus, in light of the circumstances under which
they were made) not misleading, which written notice need not provide any
detail as to the nature of such event.
(c) The Company shall use reasonable commercial efforts to obtain
the withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Securities included
within the coverage of the Shelf Registration, without charge, one copy of the
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (other than those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of the Shelf
Registration Statement, without charge, as many copies of the prospectus
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(including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such person may reasonably
request. The Company consents, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Securities
covered by the prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement.
(f) Prior to any public offering of the Securities, pursuant to the
Shelf Registration Statement, the Company shall register or qualify or cooperate
with the Holders of the Securities included therein and their respective counsel
in connection with the registration or qualification of such Securities for
offer and sale under the securities or "blue sky" laws of such states of the
United States as any such Holder reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the Securities
to facilitate the timely preparation and delivery of certificates representing
the Securities to be sold pursuant to the Shelf Registration Statement free of
any restrictive legends and in such denominations and registered in such names
as the Holders may request a reasonable period of time prior to sales of the
Securities pursuant to the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 2(b) above during the period for which the Company is
required to maintain an effective Shelf Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the Shelf
Registration Statement or an amendment or supplement to the related prospectus
and any other required document so that, as thereafter delivered to Holders or
purchasers of Securities, the prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the
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statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Initial Purchasers or the Holders in
accordance with paragraphs (ii) through (v) of Section 2(b) above to suspend the
use of the prospectus until the requisite changes to the prospectus have been
made, then the Initial Purchasers and the Holders shall suspend use of such
prospectus.
(i) Not later than the effective date of the Shelf Registration
Statement, the Company will provide CUSIP numbers for the Notes and the Common
Stock registered under the Shelf Registration Statement, and provide the Trustee
with printed certificates for such Notes, in form eligible for deposit with The
Depository Trust Company.
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period.
(k) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in a timely
manner and containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.
(l) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
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<PAGE>
(m) The Company shall (i) make reasonably available for inspection
by the Holders of the Securities and any attorney, accountant or other agent
retained by the Holders of the Securities all relevant financial and other
records, pertinent corporate documents and properties of the Company and (ii)
cause the Company's officers, directors, employees, accountants and auditors to
supply all relevant information reasonably requested by the Holders of the
Securities or any such attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case, as shall be reasonably necessary to
enable such persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act; provided, however, that the foregoing
inspection and information gathering (i) shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one counsel
(the "Designated Counsel") designated by the Holders of a majority in principal
amount of the Securities covered by the Shelf Registration Statement (provided
that Holders of Common Stock issued upon the conversion of the Notes shall be
deemed to be Holders of the aggregate principal amount of Notes from which such
Common Stock was converted) and (ii) shall not be available for any such Holder
that is a competitor of the Company.
(n) The Company, if requested by the Designated Counsel, shall cause
(i) its counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to such Holders, and dated, in the case
of the initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such opinion shall include,
without limitation, the due incorporation and good standing of the Company and
its subsidiaries; the qualification of the Company and its subsidiaries to
transact business as foreign corporations; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
applicable Securities; the absence of material legal or governmental proceedings
involving the Company and its subsidiaries; the absence of governmental
approvals required to be obtained in connection with the Shelf Registration
Statement, or the offering and sale of the applicable Securities; the compliance
as to form of such Shelf Registration Statement and any documents incorporated
by reference therein and of the Indenture with the requirements of the
Securities Act and the Trust Indenture Act, respectively; and, as of the date of
the opinion and as of the effective date of the Shelf Registration Statement or
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<PAGE>
most recent post-effective amendment thereto, as the case may be, the absence
from such Shelf Registration Statement and the prospectus included therein, as
then amended or supplemented, and from any documents incorporated by reference
therein of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any such documents, in the
light of the circumstances existing at the time that such documents were filed
with the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), (ii) its officers to execute and deliver all customary
documents and certificates and updates thereof requested by the Designated
Counsel and (iii) its independent public accountants and the independent public
accountants with respect to any other entity for which financial information is
provided in the Shelf Registration Statement to provide to the selling Holders
of the applicable Securities a comfort letter in customary form and covering
matters of the type customarily covered in comfort letters in connection with
primary underwritten offerings, subject to receipt of appropriate documentation
as contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
(o) The Company will use its best efforts to continue to have the
Notes rated by the rating agencies that rated the Notes in connection with the
sale to the Initial Purchasers and, at the request of any Holder, confirm to
such Holder the current rating of the Notes at the time of such request.
(p) The Company shall use reasonable commercial efforts to take all
other steps necessary to effect the registration of the Securities covered by
the Shelf Registration Statement contemplated hereby.
3. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 1 through 2 hereof, whether or not the Shelf Registration Statement is
filed or becomes effective, and shall bear or reimburse the Holders of the
Securities covered by the Shelf Registration for the reasonable fees and
disbursements of the Designated Counsel (provided that Holders of Common Stock
issued upon the conversion of the Notes shall be deemed to be Holders of the
aggregate principal amount of Notes from which such
8
<PAGE>
Common Stock was converted) to act as counsel for the Holders in connection
therewith.
4. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Securities Act or the Exchange Act (each Holder and such
controlling persons are referred to collectively as the "Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof (including, but not limited to, any losses,
claims, damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party becomes subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and subject to subsection (c) below, shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon (x) the use of
any prospectus in violation of the last sentence of Section 2(h), or (y) any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to the Shelf
Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein and (ii) with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to the Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent that a
prospectus
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<PAGE>
relating to such Securities was required to be delivered by such Holder under
the Securities Act in connection with such purchase and any such loss, claim,
damage or liability of such Holder results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the final prospectus if the Company
had previously furnished copies thereof to such Holder; provided further,
however, that this indemnity agreement will be in addition to any liability
which the Company may otherwise have to such Indemnified Party.
(b) Each Holder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act from and against any
losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company or any such controlling person becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a Shelf
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, and to subsection (c)
below, shall reimburse, as incurred, the Company for any legal or other expenses
reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Holder may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party
10
<PAGE>
under this Section 4, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in subsections (a) or (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party if the representation of both such parties by
the same counsel would constitute a conflict of interest), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsections (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the registration of the
Securities, pursuant to the Shelf Registration, or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
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<PAGE>
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
Section 4(d), the Holders shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from the
sale of the Securities pursuant to the Shelf Registration Statement exceeds the
amount of damages which such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall survive the
sale of the Securities pursuant to the Shelf Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.
5. Additional Interest Under Certain Circumstances. (a) Additional
interest (the "Additional
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Interest") with respect to the Notes shall be assessed as follows if any of the
following events occur (each such event in clauses (i) through (iii) below being
herein called a "Registration Default"):
(i) if by the earlier to occur of (x) March 31, 1997 and (y) the
fifth business day next following the date on which the Company files with
the Commission its Annual Report on Form 10-K for its fiscal year ended
December 31, 1996, the Shelf Registration Statement has
not been filed with the Commission;
(ii) if by the earlier to occur of (x) May 31, 1997 and (y) the 65th
day next following the date on which the Company files with the Commission
its Annual Report on Form 10-K for its fiscal year ended December 31,
1996, the Shelf Registration Statement has not been declared effective by
the Commission; or
(iii) if after the Shelf Registration Statement is declared effective
(A) the Shelf Registration Statement thereafter ceases to be effective; or
(B) the Shelf Registration Statement or the related prospectus ceases to
be usable (in each case except as permitted in paragraph (b) below) in
connection with resales of Transfer Restricted Securities in accordance
with and during the periods specified herein because either (1) any event
occurs as a result of which the related prospectus forming part of such
Shelf Registration Statement would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, or (2) it shall be necessary to amend such Shelf
Registration Statement or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the respective rules
thereunder.
Additional Interest shall accrue on the Notes over and above the
interest set forth in the title of the Notes from and including the date on
which any such Registration Default shall occur, to but excluding the date on
which all such Registration Defaults have been cured, at a rate of 0.50% per
annum.
(b) A Registration Default referred to in
Section 5(a)(iii) shall be deemed not to have occurred and
be continuing in relation to the Shelf Registration
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Statement or the related prospectus if (i) such Registration Default has
occurred solely as a result of (x) the filing of a post-effective amendment to
the Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related prospectus or (y) other material events, with respect to the Company
that would need to be described in the Shelf Registration Statement or the
related prospectus and (ii) in the case of clause (y), the Company proceeds
promptly and in good faith to amend or supplement the Shelf Registration
Statement and related prospectus to describe such events if the Company has
determined in good faith that there are no material legal or commercial
impediments in so doing; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 45 days,
Additional Interest shall be payable in accordance with the above paragraph from
the day such Registration Default occurs until such Registration Default is
cured.
(c) Any amounts of Additional Interest due pursuant to clause
(a)(i), (a)(ii) or (a)(iii) of this Section 5 will be payable in cash on the
regular interest payment dates with respect to the Notes. The amount of
Additional Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Notes, multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months), and the denominator of which is 360. The
indebtedness represented by the Additional Interest shall be subordinated in
right of payment to all existing and future Senior Indebtedness (as defined in
the Indenture) as and to the same extent as the Notes.
(d) "Transfer Restricted Securities" means each Security until (i)
the date on which such Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (ii) the date on which such Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act.
6. Rules 144 and 144A. The Company shall use its best efforts to
file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely
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<PAGE>
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder of Transfer Restricted Securities, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rules 144 and 144A. The Company covenants that, if
in the event the Company is no longer subject to Sections 13 or 15(d) of the
Exchange Act, it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including the requirements of Rule
144A(d)(4)). The Company will provide a copy of this Agreement to prospective
purchasers of Securities identified to the Company by the Initial Purchasers
upon request. Notwithstanding the foregoing, nothing in this Section 6 shall be
deemed to require the Company to register any of its securities pursuant to the
Exchange Act.
7. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, except by the Company
and the written consent of the Holders of a majority in principal amount of the
Securities (provided that Holders of Common Stock issued upon conversion of
Notes shall be deemed to be Holders of the aggregate principal amount of Notes
from which such Common Stock was converted) affected by such amendment,
modification, supplement, waiver or consents.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(b),
which address initially is, with respect to each Holder, the address
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<PAGE>
of such Holder to which confirmation of the sale of the Notes to such
Holder was first sent by the Initial Purchasers, with a copy in like
manner to you as follows:
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Fax No.: (212) 318-0532
Attention: Transactions Advisory Group
(if after November 15, 1996,
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8728
Attention: Transactions Advisory Group)
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Fax No.: (212) 474-3700
Attention: John T. Gaffney, Esq.
(2) if to the Initial Purchasers, at the addresses
specified in Section 7(b)(1);
(3) if to the Company, at its address as follows:
SEACOR Holdings, Inc.
1370 Avenue of the Americas
25th Floor
New York, NY 10019
Fax No.: (212) 582-8522
Attention: Randall Blank
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Fax No.: (212) 310-8007
Attention: David E. Zeltner, Esq.
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All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) No Inconsistent Agreements; Damages. The Company has not, as of
the date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts with the provisions
hereof. Notwithstanding anything to the contrary contained in this Agreement, it
is hereby acknowledged and agreed that the Company shall have no liability for
monetary damages to the Initial Purchasers or any Holder for any breaches,
failures to comply or violations by it of Section 1 or 2 of this Agreement
except as expressly provided in Section 4 or 5 hereof; provided, however, in the
event that the Company breaches, fails to comply or violates the provisions of
Section 1 or 2 hereof, the Holders shall be entitled to, and the Company shall
not oppose the granting of, equitable relief, including injunction and specific
performance.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Securities. The Company hereby agrees
to extend the benefits of this Agreement to any Holder of Securities and any
such Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the Company submits
to the nonexclusive jurisdiction of any federal or state court in the State of
New York.
(h) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(i) Securities Held by the Company. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Securities is
required hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
SEACOR HOLDINGS, INC.
By:/s/ Randall Blank
----------------------------------
Name: Randall Blank
Title: Executive Vice President,
Chief Financial Officer
and Secretary
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
WASSERSTEIN PERELLA SECURITIES, INC.
by: CS First Boston Corporation
By: /s/ Marek Chatrny
--------------------------
Name: Marek Chatrny
Title: Attorney-in-Fact
19
NYFS11...:\93\73293\0013\1711\AGRN076A.080
EXHIBIT 11.0
SEACOR HOLDING, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
1995 (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ------------------------------
1996 1995 1996 1995
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
EARNINGS PER COMMON SHARE - ASSUMING NO
DILUTION, AS ADJUSTED FOR COMMON STOCK
EQUIVALENTS (a) $ 0.71 $ 0.24 $ 2.03 $ 0.81
Weighted average shares outstanding 13,074,963 7,435,320 10,923,340 7,358,055
Shares issuable from assumed conversion of common stock
equivalents (a) 258,598 135,549 243,339 105,003
Weighted average shares outstanding, as adjusted ------------ ------------ -------------- -------------
13,333,561 7,570,869 11,166,679 7,463,058
============ ============ ============= =============
EARNINGS PER COMMON SHARE - ASSUMING
FULL DILUTION $ 0.71 $ 0.24 $ 1.87 $ 0.80
Weighted average shares outstanding 13,074,963 7,435,320 10,923,340 7,358,055
Shares issuable from assumed conversion of common stock
equivalents 268,646 142,682 259,324 142,682
Shares issuable from assumed conversion of
6.0% Convertible Subordinated Notes - 2,156,083 1,437,384 2,156,083
Shares issuable from assumed conversion of
2.5% Convertible Subordinated Notes 3,405 156,650 105,568 156,650
------------ ------------ -------------- -------------
Weighted average shares outstanding, as adjusted 13,347,014 9,890,735 12,725,616 9,813,470
============ ============ ============= =============
NET INCOME FOR EARNINGS PER COMMON
SHARE COMPUTATION :
Net income for earnings per common share
computation--assuming no dilution $ 9,448 $ 1,837 $ 22,687 $ 6,058
Interest on 6.0% Convertible Subordinated Notes,
net of income tax effect - 546 1,078 1,651
Interest and debt discount on 2.5% Convertible
Subordinated Notes, net of income tax effect - 38 74 113
------------ ------------ ------------- -------------
Net income for earnings per common share
computation-- assuming full dilution, as adjusted $ 9,448 $ 2,421 $ 23,839 $ 7,822
============ ============ ============== =============
</TABLE>
(a) This computation is submitted in accordance with Regulation S-K item
601(b)(11). For the periods noted, it is contrary to APB Opinion No. 15 as
per footnote to paragraph 14 which does not require the inclusion of common
stock equivalents in the earnings per share calculation if the dilutive
effect is less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form 10-Q and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 28,484
<SECURITIES> 307
<RECEIVABLES> 44,938
<ALLOWANCES> 459
<INVENTORY> 1,487
<CURRENT-ASSETS> 77,192
<PP&E> 374,521
<DEPRECIATION> 92,392
<TOTAL-ASSETS> 378,571
<CURRENT-LIABILITIES> 26,382
<BONDS> 7,955
0
0
<COMMON> 131
<OTHER-SE> 302,199
<TOTAL-LIABILITY-AND-EQUITY> 378,571
<SALES> 0
<TOTAL-REVENUES> 160,293
<CGS> 0
<TOTAL-COSTS> 7,655
<OTHER-EXPENSES> 81,648
<LOSS-PROVISION> 141
<INTEREST-EXPENSE> 4,007
<INCOME-PRETAX> 34,997
<INCOME-TAX> 12,445
<INCOME-CONTINUING> 23,494
<DISCONTINUED> 0
<EXTRAORDINARY> 807
<CHANGES> 0
<NET-INCOME> 22,687
<EPS-PRIMARY> 2.08
<EPS-DILUTED> 1.87
</TABLE>
