<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SEACOR SMIT INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 4412 13-3542736
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
------------------------
SEACOR SMIT INC.
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)
------------------------------
MR. CHARLES FABRIKANT
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SEACOR SMIT INC.
1370 AVENUE OF THE AMERICAS
25TH FLOOR
NEW YORK, NEW YORK 10019
(212) 307-6633
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent for Service)
------------------------------
COPY TO:
DAVID E. ZELTNER, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this registration statement becomes
effective.
If any of the securities being registered on this form are to be offered in
connection with the information of a holding company and there is compliance
with General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT PRICE(1) FEE(2)
<S> <C> <C> <C> <C>
7.20% Senior Notes Due 2009 $150,000,000 99.875% $149,812,500 $45,398
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(f)(2).
(2) Calculated pursuant to Rule 457(f)(2).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED , 1997
PRELIMINARY PROSPECTUS
SEACOR SMIT INC.
OFFER TO EXCHANGE 7.20% SENIOR NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FOR 7.20% SENIOR NOTES DUE 2009 WHICH HAVE NOT BEEN SO REGISTERED
---------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED.
---------------------
SEACOR SMIT Inc., a Delaware corporation (the "Company"), hereby offers,
upon the terms and subject to the conditions set forth in this Prospectus (as
defined) and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 7.20% Senior Notes due
2009 (the "Exchange Notes") which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), for an equal principal amount of its
outstanding 7.20% Senior Notes due 2009 which have not been so registered (the
"Existing Notes"), of which an aggregate principal amount of $150,000,000 is
outstanding as of the date hereof. The form and terms of each of the Exchange
Notes will be the same in all material respects as the form and terms of each of
the Existing Notes, except that (i) the Exchange Notes will be registered under
the Securities Act and, hence will not bear legends restricting the transfer
thereof and (ii) holders of the Exchange Notes will not be entitled to certain
rights of holders of Existing Notes under the Registration Agreement dated as of
September 22, 1997 (the "Registration Agreement"), which will terminate upon
consummation of the Exchange Offer. See "The Exchange Offer--Purpose and Effect
of the Exchange Offer." Except as discussed below, the Exchange Notes will be
available only in book-entry form. The Company expects that the Exchange Notes
issued pursuant to the Exchange Offer will be issued in the form of one or more
fully registered global notes that will be deposited with, or on behalf of, The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
its nominee. Beneficial interests in the global notes representing the Exchange
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. After the initial issuance of
such global notes, Exchange Notes in certificated form will be issued in
exchange for the global notes only in accordance with the terms and conditions
set forth in the Indenture (as defined). See "Description of Exchange
Notes--Book-Entry; Delivery and Form" and "--Certificated Notes."
The Existing Notes were issued and sold in a transaction exempt from the
registration requirements of the Securities Act and may not be offered or sold
in the United States unless so registered or pursuant to an applicable exemption
under the Securities Act. The Exchange Notes are being offered herewith in order
to satisfy certain obligations of the Company contained in the Registration
Agreement. Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
that the Exchange Notes to be issued pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by holders thereof (other
than (i) a broker-dealer who purchases such Exchange Notes from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act, or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Notes are acquired in the ordinary course of such holder's
business and such holders are not participating and have no arrangement with any
person to participate in the distribution of such Exchange Notes. However, the
Company has not sought a no-action letter with respect to the Exchange Offer and
there can be no assurance the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Eligible holders wishing to
accept the Exchange Offer must represent to the Company that such conditions
have been met. Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. A broker-dealer may nonetheless be deemed to be
an "underwriter" under the Securities Act notwithstanding such disclaimer. This
Prospectus (as it may be amended or supplemented from time to time) may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Existing Notes where such Existing Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days (exclusive of
any period during which any stop order shall be in effect suspending the
effectiveness of the Registration Statement (as defined)) after the Expiration
Date (as defined herein), it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
(CONTINUED ON NEXT PAGE)
--------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 16 FOR A DESCRIPTION OF CERTAIN FACTORS
WHICH HOLDERS OF EXISTING NOTES SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE
OFFER.
---------------------
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Holders of Existing Notes whose Existing Notes are not tendered and accepted
in the Exchange Offer will continue to hold such Existing Notes and will be
entitled to all the rights and preferences and will be subject to the
limitations applicable thereto under the indenture governing the Existing Notes
and the Exchange Notes (the Existing Notes and the Exchange Notes are sometimes
referred to herein collectively as the "Notes"). Following consummation of the
Exchange Offer, the holders of Existing Notes will continue to be subject to the
existing restrictions upon transfer thereof and the Company will have no further
obligation to such holders to provide for the registration under the Securities
Act of the Existing Notes held by them. The Exchange Notes will evidence the
same debt as the Existing Notes and will be entitled to the benefits of the
indenture dated September 22, 1997 (the "Indenture") governing the Notes. The
Notes will bear interest at the rate of 7.20% per annum, payable semi-annually
on March 15 and September 15, commencing March 15, 1998. The Notes will mature
on September 15, 2009. The Company may redeem the Notes, in whole or in part, at
any time, at the redemption prices set forth herein, together with accrued and
unpaid interest, if any, to the date of redemption. The Notes will not be
subject to any sinking fund requirement. See "Description of Exchange
Notes--Optional Redemption." Other than restrictive covenants, including
limitations on liens and sale and leaseback transactions, the Indenture does not
contain any provisions that afford holders of the Notes protection in the event
of a highly leveraged or other transaction that may adversely affect such
holders. See "Description of Exchange Notes."
The Existing Notes are and the Exchange Notes will be senior unsecured
obligations of the Company. The Existing Notes rank and the Exchange Notes will
rank PARI PASSU in right of payment with all existing and future senior
indebtedness of the Company and will rank senior in right of payment to any
future subordinated indebtedness of the Company. The Notes will be effectively
subordinated to any secured debt of the Company to the extent of the assets
serving as security therefor.
The Exchange Offer is not conditioned on any minimum aggregate principal
amount of Existing Notes being tendered for exchange. The Company will accept
for exchange any and all validly tendered Existing Notes not withdrawn prior to
5:00 p.m., New York City time, on unless extended by the Company (the
"Expiration Date"). Tenders of Existing Notes may be withdrawn at any time prior
to the Expiration Date. The Exchange Offer is subject to certain customary
conditions. See "The Exchange Offer-- Conditions." The Company has agreed to pay
all expenses incident to the Exchange Offer. The Company will not receive any
proceeds from the Exchange Offer.
The Existing Notes constitute securities for which there is no established
trading market. Any Existing Notes not tendered and accepted in the Exchange
Offer will remain outstanding. The Company does not currently intend to list the
Exchange Notes on any securities exchange. To the extent that any Existing Notes
are tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Existing Notes could be adversely affected. No assurances can be
given as to the liquidity of the trading market for either the Existing Notes or
the Exchange Notes.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF EXISTING NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
------------------------
2
<PAGE>
FORWARD-LOOKING INFORMATION
WHEN INCLUDED IN THIS PROSPECTUS OR IN DOCUMENTS INCORPORATED HEREIN BY
REFERENCE, THE WORDS "EXPECTS," "INTENDS," "ANTICIPATES," "BELIEVES,"
"ESTIMATES" AND ANALOGOUS EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS INHERENTLY ARE SUBJECT TO A VARIETY OF RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, GENERAL ECONOMIC
AND BUSINESS CONDITIONS, INDUSTRY FLEET CAPACITY, CHANGES IN FOREIGN AND
DOMESTIC OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITY, COMPETITION, CHANGES
IN FOREIGN POLITICAL, SOCIAL AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND
COMPLIANCE WITH GOVERNMENTAL REGULATIONS, CUSTOMER PREFERENCES AND VARIOUS OTHER
MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. THESE FORWARD-LOOKING
STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PROSPECTUS. THE COMPANY EXPRESSLY
DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR ANY
CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN
EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY STATEMENT IS BASED.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington
D.C. 20549, and at the Commission's regional offices in Chicago, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and in New York, Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such information may also be accessed electronically by
means of the Commission's home page on the Internet (http://www.sec.gov). In
addition, such reports, proxy statements and other information can be inspected
at The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement on Form S-4
(the "Registration Statement"), filed by the Company with the Commission under
the Securities Act. This Prospectus omits certain of the information contained
in the Registration Statement in accordance with the rules and regulations of
the Commission. Reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
Notes. Statements contained herein concerning the provisions of any documents
are not necessarily complete and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
3
<PAGE>
IMPORTANT
To properly tender Existing Notes, the following procedures must be
followed:
- Each beneficial owner owning interests in Existing Notes ("Beneficial
Owner") through a DTC Participant (as defined) must instruct such DTC
Participant to cause Existing Notes to be tendered in accordance with the
procedures set forth in this Prospectus and in the Letter of Transmittal.
- Each participant (a "DTC Participant") in the Depository Trust Company
("DTC") holding Existing Notes through DTC must (i) electronically
transmit its acceptance to DTC through the DTC Automated Tender Offer
Program ("ATOP"), for which the transaction will be eligible, and DTC will
then edit and verify the acceptance, execute a book-entry delivery to the
account of First Trust National Association (the "Exchange Agent") at DTC
and send an Agent's Message (as defined) to the Exchange Agent for its
acceptance, or (ii) comply with the guaranteed delivery procedures set
forth under "Exchange Offer--Guaranteed Delivery Procedures." By tendering
through ATOP, DTC Participants will expressly acknowledge receipt of the
accompanying Letter of Transmittal and agree to be bound by its terms and
the Company will be able to enforce such agreement against such DTC
participants.
- Each registered owner of certificated Existing Notes (a "Holder") must (i)
complete and sign the accompanying Letter of Transmittal, and mail or
deliver such Letter of Transmittal, and all other documents required by
the Letter of Transmittal, together with certificate(s) representing all
tendered Existing Notes, to the Exchange Agent at its address set forth
under "The Exchange Offer--Exchange Agent," or (ii) comply with the
guaranteed delivery procedures set forth under "The Exchange
Offer--Guaranteed Delivery Procedures."
For purposes of this Prospectus, "Tendering Holder" shall mean (i) each DTC
Participant that has properly transmitted (and not properly withdrawn) its
acceptance through ATOP and in respect of which DTC has sent an Agent's Message,
(ii) each Holder that has timely delivered to the Exchange Agent (and not
properly withdrawn) a properly completed and duly executed Letter of
Transmittal, and any other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Existing Notes, or (iii)
each DTC Participant or Holder that has complied with the guaranteed delivery
procedures set forth herein.
The information in this Prospectus concerning DTC and its book-entry systems
has been obtained by the Company from sources that the Company believes to be
reliable, and the Company takes no responsibility for the accuracy thereof.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
(i) the Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997; and
(iii) the Company's Current Reports on Form 8-K/A and Form 8-K filed
March 4, 1997 and May 2, 1997.
Each document or report filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
THIS PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER
THAN EXHIBITS NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THE TEXTS OF SUCH
DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO: SEACOR SMIT INC.,
1370 AVENUE OF THE AMERICAS, 25TH FLOOR, NEW YORK, NY 10019, ATTENTION:
SECRETARY, TELEPHONE NUMBER (212) 307-6633.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BY , 199 .
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
APPEARING ELSEWHERE IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. AS
USED HEREIN AND UNLESS THE CONTEXT REQUIRES OTHERWISE, THE "COMPANY" MEANS
SEACOR SMIT INC. AND ITS SUBSIDIARIES AS WELL AS ITS PREDECESSORS, AND "SEACOR"
MEANS SEACOR SMIT INC.
THE COMPANY
The Company is a major provider of offshore marine services to the oil and
gas exploration and production industry and is one of the leading providers of
oil spill response services to owners of tank vessels and oil storage,
processing and handling facilities. As of June 30, 1997, the Company operated a
diversified fleet of 306 vessels primarily dedicated to servicing offshore oil
and gas exploration and production facilities in the U.S. Gulf of Mexico, the
North Sea, offshore West Africa, Mexico, the Far East, Latin America and the
Mediterranean. The recent consummation of the acquisition of assets, including
certain vessels owned by Galaxie Marine Service, Inc., Moonmaid Marine, Inc.,
Waveland Marine Service, Inc. and Triangle Marine Inc. (the "Galaxie
Transaction"), as well as a vessel construction contract has enlarged the
Company's fleet capacity in the U.S. Gulf of Mexico. The Company's offshore
service vessels deliver cargo and personnel to offshore installations, handle
anchors for drilling rigs and other marine equipment, support offshore
construction and maintenance work and provide standby safety support. The
Company also furnishes vessels for special projects such as well stimulation,
seismic data gathering, freight hauling and line handling. In connection with
its offshore marine services, the Company, through Energy Logistics, Inc., a
joint venture with Baker Energy, a unit of the Michael Baker Corporation, a U.S.
public company, also offers logistics services for the offshore industry,
including the coordination and provision of marine, air and land transportation,
materials handling and storage, inventory control and "just-in-time"
procurement.
The Company's environmental services business principally provides
contractual oil spill response services to entities who store, transport,
produce or handle petroleum and certain other non-petroleum oils as required by
the Oil Pollution Act of 1990 ("OPA 90") and various state regulations. The
Company's services, provided primarily through its indirect wholly-owned
subsidiary, National Response Corporation ("NRC"), also include training for and
supervision of activities in response to oil spill emergencies and the
maintenance of specialized equipment for immediate deployment and spill
response. NRC has acted as the principal oil spill response contractor on
several of the largest oil spills that have occurred in the United States since
the enactment of OPA 90.
In August 1997, SEACOR Offshore Rigs Inc. ("SEACOR Rigs"), a wholly-owned
subsidiary of SEACOR, invested approximately $9.0 million in exchange for a 50%
interest in Chiles Offshore LLC ("Chiles"), a joint venture and strategic
alliance created to manage and invest in partnerships which will construct, own
and operate two premium jackup drilling rigs, which have been contracted for
delivery in 1999. The Company believes that this business is complementary to
SEACOR's marine transportation and logistics business. SEACOR Rigs anticipates
contributing an additional $26.0 million as a limited partner in such
partnerships, partially funding rig construction. Estimated total project costs
of approximately $160.0 million may be funded, in part, through the sale of
units in the rig-owning partnerships. It is anticipated that SEACOR Rigs will
initially own 80% of these partnerships through its 50% equity holding in Chiles
and its direct investment in the rig-owning partnerships; however, the Company
anticipates reducing its ownership interests through a possible sale of
partnership units. On September 8, 1997, Chiles entered into a letter of intent
for the construction of two additional premium jackup drilling rigs. Estimated
total project costs for each rig would be approximately $92.0 million. The
Company does not presently intend to fund any portion of such costs. The
transaction is contingent upon the preparation, negotiation and execution of
definitive documentation and Chiles' ability to obtain financing therefor by
December 7, 1997. Consequently, there can be no assurance that such transaction
will be consummated.
6
<PAGE>
BUSINESS STRATEGY
The Company's strategy is to identify and pursue opportunities for growth,
development and integration of its offshore marine, environmental services and
other related marine and energy businesses.
OFFSHORE MARINE SERVICES
The Company seeks to pursue growth opportunities while balancing its
exposure to the cyclical nature of the oil and gas exploration and production
industry. The Company implements this strategy by (i) diversifying
geographically to enhance asset utilization and enable the Company to take
advantage of cyclical market opportunities, (ii) maintaining a balance between
long-term charters, which enhance asset utilization, increase the predictability
of cash flows and foster lasting customer relationships, and short term
charters, which provide the Company with flexibility to take advantage of
improving market conditions and opportunities in different markets, (iii)
maintaining a diversified fleet of vessels that enables the Company to service a
broad range of customer requirements and (iv) meeting its customers' needs
through efficient use of existing vessels and logistical systems and through
modifying and converting vessels for specialized services.
ENVIRONMENTAL SERVICES
The Company seeks to expand its OPA 90 related business and balance its
exposure to the event-driven nature of the oil spill response business by (i)
pursuing new customer relationships and expanding the scope of its services to
customers by identifying, developing and providing services ancillary to the
requirements of OPA 90, (ii) expanding its oil spill response and ancillary
services businesses internationally, (iii) expanding its sources of retainer
revenue by actively marketing its environmental services to vessel owners,
facilities and others who must comply with various state and federal
environmental regulations but are not subject to the requirements of OPA 90 and
(iv) maintaining a highly efficient and cost-effective spill response network by
coordinating and managing existing resources and supplementing them with a
variety of purpose-built equipment.
OTHER RELATED BUSINESSES
The Company seeks acquisition and investment opportunities in other related
marine and energy businesses that are complementary to the Company's current
operations, such as its August 1997 investment in Chiles.
Through implementation of its business strategy and as a result of improving
industry conditions, the Company increased net income in the first six months of
1997 to $66.9 million, or $4.14 per fully-diluted share, from $13.2 million, or
$1.16 per fully-diluted share, respectively, in the first six months of 1996.
Operating revenues increased to $164.4 million from $102.7 million, and EBITDA
increased to $74.1 million from $34.3 million for the comparable periods. Total
assets were $720.7 million at June 30, 1997 compared to $636.5 million at
December 31, 1996.
7
<PAGE>
THE EXCHANGE OFFER
<TABLE>
<S> <C>
EXISTING NOTES................ The Existing Notes were sold by the Company on September 22, 1997, to Salomon
Brothers Inc, Bear Stearns & Co. Inc. and Credit Suisse First Boston Corporation
(collectively, the "Initial Purchasers") pursuant to a Purchase Agreement, dated
September 15, 1997 (the "Purchase Agreement"). The Initial Purchasers
subsequently resold the Notes to qualified institutional buyers pursuant to Rule
144A under the Securities Act or outside the United States in compliance with
Regulation S under the Securities Act.
REGISTRATION AGREEMENT........ Pursuant to the Purchase Agreement, the Company and the Initial Purchasers
entered into the Registration Agreement, which grants the holders of the
Existing Notes certain exchange and registration rights. The Exchange Offer is
intended to satisfy such exchange and registration rights which terminate upon
the consummation of the Exchange Offer.
SECURITIES OFFERED............ $150,000,000 aggregate principal amount of 7.20% Senior Notes due 2009, which
have been registered under the Securities Act (the "Exchange Notes").
THE EXCHANGE OFFER............ The Company is offering to exchange $1,000 principal amount of Exchange Notes
for each $1,000 principal amount of Existing Notes that are properly tendered
and accepted. The Company will issue Exchange Notes on or promptly after the
Expiration Date. As of the date hereof, there is $150,000,000 aggregate
principal amount of Existing Notes outstanding. The terms of the Exchange Notes
are identical in all material respects to the terms of the Existing Notes for
which they may be exchanged pursuant to the Exchange Offer, except that the
Exchange Notes are freely transferable by holders thereof (other than as
provided herein), and are not subject to any covenant restricting transfer
absent registration under the Securities Act. See "The Exchange Offer." The
Exchange Offer is not conditioned upon any minimum aggregate principal amount of
Existing Notes being tendered for exchange.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Based on no-action letters issued by the staff of the Commission to third
parties with respect to similar transactions, including "Exxon Capital Holdings
Corporation" (available May 13, 1988) and "Morgan Stanley & Co. Incorporated"
(available June 5, 1991) and similar no-action letters, the Company believes
that the Exchange Notes issued pursuant to the Exchange Offer in exchange for
Existing Notes may be offered for resale, resold and otherwise transferred by
holders thereof (other than (i) a broker-dealer who purchases such Exchange
Notes from the Company to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, or (ii) a person that is an "affiliate" of
the Company within the meaning of Rule 405 of the Securities Act) without
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Notes are acquired in the ordinary
course of such holder's business and such holders are not engaged in, have no
arrangement or understanding with any person to participate in, and do not
intend to engage in, any distribution of the Exchange Notes. However, the
Company has not sought a no-action letter with respect to the Exchange Offer and
there can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Each holder of Exchange Notes,
other than a broker-dealer, must represent that such conditions have been met.
In addition, each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal accompanying this Prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. A broker-dealer may
nonetheless be deemed to be an "underwriter" under the Securities Act
notwithstanding such disclaimer. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Existing Notes where
such Existing Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. Pursuant to the
Registration Agreement, the Company has agreed that, for a period of 180 days
(exclusive of any period during which a stop order shall be in effect suspending
the effectiveness of the Registration Statement) after the Expiration Date, it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "The Exchange Offer--Purpose and Effect of the
Exchange Offer" and "Plan of Distribution."
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Any holder who tenders in the Exchange Offer with the intention to participate,
or for the purpose of participating, in a distribution of the Exchange Notes
will not be able to rely on the position of the staff of the Commission
enunciated in no-action letters and, in the absence of an applicable exemption,
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Failure to comply with
such requirements in such instance may result in such holder incurring liability
under the Securities Act for which the holder is not indemnified by the Company.
EXPIRATION DATE............... 5:00 p.m., New York City time, on , unless the Exchange Offer is extended,
in which case the term "Expiration Date" means the latest date and time to which
the Exchange Offer is extended. See "The Exchange Offer--Expiration Date;
Extensions; Amendments."
ACCRUED INTEREST OR
ACCUMULATED DIVIDENDS ON THE
EXCHANGE NOTES.............. Each Exchange Note will bear interest from the most recent date to which
interest has been paid on the Existing Notes or, if no interest has been paid on
such Existing Notes, from September 22, 1997.
EXCHANGE DATE................. As soon as practicable after the close of the Exchange Offer, the Issuer will
accept for exchange all Existing Notes properly tendered and not validly
withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. See
"The Exchange Offer-- Withdrawal of Tenders."
CONDITIONS TO
THE EXCHANGE OFFER.......... The Exchange Offer is subject to customary conditions, certain of which may be
waived by the Company. The Company reserves the right to terminate or amend the
Exchange Offer at any time prior to the Expiration Date upon the occurrence of
any such condition. The Exchange Offer is not conditioned on any minimum
aggregate principal amount of Existing Notes being tendered for exchange. See
"The Exchange Offer--Conditions."
CONSEQUENCES OF FAILURE
TO EXCHANGE................. Any Existing Notes not tendered pursuant to the Exchange Offer will remain
outstanding and continue to accrue interest. Such Existing Notes will remain
"restricted securities" under the Securities Act, subject to the transfer
restrictions described herein. As a result, the liquidity of the market for such
Existing Notes could be adversely affected upon completion of the Exchange
Offer. See "Risk Factors--Consequences of Failure to Exchange" and "The Exchange
Offer--Consequences of Failure to Exchange."
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS.............. The exchange pursuant to the Exchange Offer should not be a taxable event for
U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax
Considerations."
USE OF PROCEEDS............... There will be no cash proceeds to the Company from the Exchange Offer. See "Use
of Proceeds."
PROCEDURES FOR TENDERING...... Each beneficial owner owning interests in Existing Notes through a DTC
Participant must instruct such DTC Participant to cause Existing Notes to be
tendered in accordance with the procedures set forth in this Prospectus and in
the Letter of Transmittal. See "The Exchange Offer--Procedures for
Tendering--Existing Notes held through DTC."
Each DTC Participant holding Existing Notes through DTC must (i) electronically
transmit its acceptance to DTC through ATOP for which the transaction will be
eligible, and DTC will then edit and verify the acceptance, execute a book-entry
delivery to the Exchange Agent's account at DTC and send an Agent's Message (as
defined herein) to the Exchange Agent for its acceptance, or (ii) comply with
the guaranteed delivery procedures set forth in this Prospectus and in the
Letter of Transmittal. By tendering through ATOP, DTC Participants will
expressly acknowledge receipt of the accompanying Letter of Transmittal and
agree to be bound by its terms and the Company will be able to enforce such
agreement against such DTC participants. See "The Exchange Offer--Procedures for
Tendering--Existing Notes held through DTC," and "-- Guaranteed Delivery
Procedures--Existing Notes held through DTC."
Each Holder must (i) complete and sign a Letter of Transmittal, and mail or
deliver such Letter of Transmittal, and all other documents required by the
Letter of Transmittal, together with certificate(s) representing all tendered
Existing Notes, to the Exchange Agent at its address set forth in this
Prospectus and in the Letter of Transmittal, or (ii) comply with the guaranteed
delivery procedures set forth in this Prospectus. See "The Exchange
Offer--Procedures for Tendering," "--Exchange Agent," and "--Guaranteed Delivery
Procedures--Existing Notes held by Holders."
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
By tendering, each holder will represent to the Company that, among other
things, (i) it is not an affiliate of the Company, (ii) it is not a
broker-dealer tendering Existing Notes acquired directly from the Company for
its own account, (iii) the Exchange Notes acquired pursuant to the Exchange
Offer are being obtained in the ordinary course of business of such holder and
(iv) it has no arrangements or understandings with any person to participate in
the Exchange Offer for the purpose of distributing the Exchange Notes. See "The
Exchange Offer-- Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES.................. DTC Participants holding Existing Notes through DTC who wish to cause their
Existing Notes to be tendered, but who cannot transmit their acceptances through
ATOP prior to the Expiration Date, may effect a tender in accordance with the
procedures set forth in this Prospectus and in the Letter of Transmittal. See
"Exchange Offer--Guaranteed Delivery Procedures." Holders who wish to tender
their Existing Notes but (i) whose Existing Notes are not immediately available
and will not be available for tendering prior to the Expiration Date, or (ii)
who cannot deliver their Existing Notes, the Letter of Transmittal, or any other
required documents to the Exchange Agent prior to the Expiration Date, may
effect a tender in accordance with the procedures set forth in this Prospectus.
See "The Exchange Offer--Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS............. The tender of Existing Notes pursuant to the Exchange Offer may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date, in
accordance with the procedures set forth in this Prospectus. See "The Exchange
Offer-- Withdrawal of Tenders."
EXCHANGE AGENT................ First Trust National Association is serving as Exchange Agent in connection with
the Exchange Offer. See "The Exchange Offer--Exchange Agent."
SHELF REGISTRATION
STATEMENT................... Under circumstances described in the Registration Agreement, certain Initial
Purchasers of Existing Notes may require the Company to file, and use its best
efforts to cause to become effective, a shelf registration statement under the
Securities Act, which would cover resales of Existing Notes by such holders. See
"Exchange Offer--Purpose and Effect of the Exchange Offer."
</TABLE>
12
<PAGE>
TERMS OF THE EXCHANGE NOTES
<TABLE>
<S> <C>
SECURITIES OFFERED................ $150.0 million principal amount of 7.20% Notes Due 2009,
which have been registered under the Securities Act.
MATURITY.......................... The Exchange Notes will mature on September 15, 2009.
INTEREST PAYMENT DATES............ Interest on the Exchange Notes is payable semiannually
on each March 15 and September 15, commencing March 15,
1998.
OPTIONAL REDEMPTION............... The Exchange Notes may be redeemed at any time at the
option of the Company, in whole or from time to time in
part, at a price equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the date of
redemption plus a Make-Whole Premium relating to the
then prevailing Treasury Yield and the remaining life of
the Notes. See "Description of Exchange Notes--Optional
Redemption."
CERTAIN COVENANTS................. The Indenture relating to the Exchange Notes will
contain limitations on the Company's ability to (i)
incur certain liens and (ii) engage in certain sale and
leaseback transactions. See "Description of Exchange
Notes--Certain Covenants."
RANKING........................... The Exchange Notes will be senior securities of the
Company, ranking PARI PASSU with all other
unsubordinated and unsecured indebtedness of the
Company. The Company, as of September 30, 1997, had
outstanding $30.7 million of senior indebtedness,
approximately $6.8 million of which was principal amount
of borrowings under a $100.0 million revolving bank
credit facility with Den norske Bank ASA, as Agent for
itself and the other lenders named therein (the "DnB
Facility"), and $150.0 million of Existing Notes, with
which the Exchange Notes would rank PARI PASSU.
USE OF PROCEEDS................... There will be no cash proceeds to the Company from the
exchanges pursuant to the Exchange Offer.
</TABLE>
13
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The following table sets forth summary historical and pro forma financial
information for the Company at the dates and for the periods indicated. The
following data should be read in conjunction with "Selected Historical Financial
Information," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Consolidated Financial Statements and notes
thereto incorporated by reference in this Offering Memorandum. The historical
consolidated results of operations for the six months ended June 30, 1996 and
June 30, 1997 are unaudited and not necessarily indicative of the results of
operations for the full year.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
YEAR ENDED DECEMBER 31, 30,
--------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
PRO FORMA PRO FORMA
1994 1995 1996 1996(1) 1996 1996(2)
--------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue
Marine......................................... $ 93,985 $ 104,894 $ 193,557 $ 257,422 $ 87,736 $ 119,905
Environmental.................................. -- 21,765 30,887 30,887 15,012 15,012
Operating expenses
Marine......................................... 55,860 66,205 108,043 148,339 50,027 70,325
Environmental.................................. -- 12,223 16,625 16,625 8,156 8,156
Administrative and general....................... 7,278 13,953 22,304 25,983 11,117 12,961
Depreciation and amortization.................... 14,108 18,842 24,967 33,250 11,542 15,684
Operating income................................. 16,739 15,436 52,505 64,112 21,906 27,791
Interest Expense............................... 5,422 6,681 5,713 13,426 3,452 7,266
Interest (Income).............................. (1,874) (2,583) (3,558) (3,558) (1,042) (1,042)
Net income....................................... 9,327 11,325 34,153 37,332 13,239 14,029
Net income per common share:
Assuming no dilution(3)........................ $ 1.29 $ 1.48 $ 2.90 $ 2.66 $ 1.31 $ 1.00
Assuming full dilution......................... 1.22 1.36 2.67 2.61 1.16 1.00
Weighted average common shares:
Assuming no dilution(3)........................ 7,219,002 7,665,235 11,776,743 14,037,057 10,071,417 14,005,385
Assuming full dilution......................... 9,625,544 10,032,332 13,568,933 16,511,369 12,419,836 14,041,078
STATEMENT OF CASH FLOWS DATA:
Cash provided by operating activities............ $ 21,150 $ 9,939 $ 58,737 -- $ 22,669 --
Cash provided by (used in) investing
activities..................................... (4,855) (78,695) (100,120) -- (7,511) --
Cash provided by (used in) financing
activities..................................... (7,714) 53,291 161,482 -- (15,766) --
OTHER FINANCIAL DATA:
EBITDA(4)........................................ $ 32,923 $ 35,964 $ 79,730 $ 99,620 $ 34,291 $ 44,318
Ratio of earnings to fixed charges(5)............ 3.17 3.18 9.71 5.08 6.33 3.91
Ratio of EBITDA to certain fixed charges(6)...... 6.07 5.38 13.96 7.42 9.93 6.10
<CAPTION>
<S> <C>
1997
----------
<S> <C>
INCOME STATEMENT DATA:
Operating revenue
Marine......................................... $ 154,948
Environmental.................................. 9,479
Operating expenses
Marine......................................... 74,879
Environmental.................................. 4,100
Administrative and general....................... 14,115
Depreciation and amortization.................... 17,621
Operating income................................. 53,712
Interest Expense............................... 5,641
Interest (Income).............................. (4,561)
Net income....................................... 66,861
Net income per common share:
Assuming no dilution(3)........................ $ 4.74
Assuming full dilution......................... 4.14
Weighted average common shares:
Assuming no dilution(3)........................ 14,119,642
Assuming full dilution......................... 16,969,634
STATEMENT OF CASH FLOWS DATA:
Cash provided by operating activities............ $ 39,870
Cash provided by (used in) investing
activities..................................... (20,843)
Cash provided by (used in) financing
activities..................................... (5,841)
OTHER FINANCIAL DATA:
EBITDA(4)........................................ $ 74,094
Ratio of earnings to fixed charges(5)............ 16.74
Ratio of EBITDA to certain fixed charges(6)...... 11.94
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30,
1997
<S> <C>
HISTORICAL
---------------
<CAPTION>
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Cash and temporary investments................................................................. $ 162,213
Total assets................................................................................... 720,710
Long-term debt (including current portion): --
Capital lease obligations.................................................................... 23,393
5 3/8% Convertible Subordinated Notes Due November 15, 2006.................................. 187,750
DnB Facility................................................................................. 6,991
Other senior secured debt.................................................................... 750
Total debt..................................................................................... 218,884
Total stockholders' equity..................................................................... 411,143
</TABLE>
(SEE FOOTNOTES ON FOLLOWING PAGE)
14
<PAGE>
(1) Reflects adjustments to the Company's historical results of operations for
the year ended December 31, 1996, to give effect to (i) the 6.0% Note
Conversion, (ii) the consummation of the 1996 Common Stock Offering
(including the application of the net proceeds therefrom), (iii) the
completion of the 1996 CNN Transaction (including the issuance of 156,650
shares of Common Stock upon conversion of the 2.5% Notes), (iv) the
Convertible Notes Placement and (v) the Smit Transaction, in each case as if
such transactions occurred on January 1, 1996. See "1996 Transactions."
(2) Reflects adjustments to the Company's historical results of operations for
the six months ended June 30, 1996, to give effect to (i) the 6.0% Note
Conversion, (ii) the consummation of the 1996 Common Stock Offering
(including the application of the net proceeds therefrom), (iii) the
completion of the 1996 CNN Transaction (including the issuance of 156,650
shares of Common Stock upon conversion of the 2.5% Notes), (iv) the
Convertible Notes Placement and (v) the Smit Transaction, in each case as if
such transactions occurred on January 1, 1996. See "1996 Transactions."
(3) 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 thereto which does not require the inclusion of
common stock equivalents in the earnings per share calculation if the
dilutive effect is less than 3%.
(4) As used herein, "EBITDA" is operating income plus depreciation and
amortization, amortization of deferred mobilization costs, which is included
in marine operating expenses, minority interest in (income) loss of
subsidiary and equity in net earnings of 50% or less owned companies. EBITDA
should not be considered by an investor as an alternative to net income as
an indicator of the Company's operating performance or to cash flows as a
measure of liquidity.
(5) This computation is submitted in accordance with Regulation S-K Item 503(d).
Earnings are computed as Income Before Income Taxes, Minority Interest,
Equity in Earnings of 50% or Less Owned Companies, and Extraordinary Item
plus fixed charges and Minority Interest in Income of Subsidiary. Fixed
charges are computed as interest, whether expensed or capitalized,
amortization of debt expense and discount and the portion of rental expense
representative of interest.
(6) As used herein, the ratio of EBITDA to certain fixed charges is EBITDA
divided by interest, whether expensed or capitalized, exclusive of
amortization of debt expense and discount. The ratio of EBITDA to certain
fixed charges should not be considered by an investor as an alternative to
cash flows or ratio of earnings to fixed charges as a measure of liquidity.
15
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS, IN
ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS.
INDUSTRY CONDITIONS
OFFSHORE MARINE SERVICES; MARKET VOLATILITY
The Company's offshore vessel operations are dependent on activity in the
offshore oil and gas exploration and production industry. The level of
exploration and development of offshore areas is affected by both short-term and
long-term trends in oil and gas prices which, in turn, are related to the demand
for petroleum products and the current availability of oil and gas resources.
The level of offshore activity also is related to local policies that influence
drilling activities. In recent years, oil and gas prices and, therefore, the
level of offshore exploration and drilling activity have been volatile. A
significant or prolonged decline in future oil and gas prices likely would
result in reduced exploration and development of offshore areas and a decline in
the demand for offshore marine services. Such reduced activity could have a
material adverse effect on the Company's financial condition and results of
operations.
Charter rates for the Company's vessels also are dependent on the supply of
offshore marine vessels. Excess vessel capacity in the industry can result from
refurbishment of inactive vessels, conversion of vessels formerly dedicated to
services other than oil support and related offshore marine activities and
construction of new vessels. The addition of new capacity to the worldwide
offshore marine fleet would increase competition in those markets where the
Company presently operates which, in turn, could have a material adverse effect
on the Company's financial condition and results of operations.
ENVIRONMENTAL SERVICES
The environmental response business is dependent upon the development,
interpretation and enforcement of regulations promulgated under OPA 90 and, to a
lesser extent, upon oil spill response regulations developed at the state level.
There currently is no uniformity of regulatory development or enforcement on a
federal or state level. The Company believes that it generally benefits from
increasingly stringent oil spill regulations and from increased enforcement of
such regulations (which, in each case, increases demand for NRC's services).
However, a relaxation of oil spill requirements or decreased enforcement of such
regulations could reduce demand for NRC's services and, therefore, have a
material adverse effect on the Company's financial condition and results of
operations.
RELIANCE ON FOREIGN OPERATIONS
For the six months ended June 30, 1997, approximately 41% of the Company's
offshore marine revenues were derived from foreign operations. The Company's
foreign offshore marine operations are subject to various risks inherent in
conducting business in foreign nations. These risks include, among others,
political instability, potential vessel seizure, nationalization of assets,
currency restrictions and exchange rate fluctuations, import-export quotas and
other forms of public and governmental regulation, all of which are beyond the
control of the Company. Although, historically, the Company's operations have
not been affected materially by such conditions or events, it is not possible to
predict whether any such conditions or events might develop in the future. The
occurrence of any one or more of such conditions or events could have a material
adverse effect on the Company's financial condition and results of operations.
The Company currently operates 33 vessels offshore West Africa, which
primarily service the local offshore oil and gas industry. The Company's
operations offshore West Africa are highly dependent on the level of activity in
Nigeria. At this time, Nigeria, because of its domestic policies, has become the
subject of certain international sanctions, including the suspension of
development aid by the European Union and the suspension of Nigeria from the
Commonwealth of Nations. Additional sanctions may be imposed in
16
<PAGE>
the future, which could include economic sanctions, such as an oil embargo.
Economic sanctions or an oil embargo would have a significant negative impact on
activity in the oil and gas industry offshore West Africa, which in turn would
have a negative impact on the Company's operations in that area. There can be no
assurance that the effects of economic sanctions or an oil embargo with respect
to Nigeria would not have a material adverse effect on the Company's financial
condition and results of operations.
CURRENCY FLUCTUATIONS
Due to its foreign operations, the Company is exposed to currency
fluctuations and exchange rate risks. To minimize the financial impact of these
risks, the Company attempts to contract the majority of its services in U.S.
dollars. However, in certain of the Company's foreign operations, the Company
collects revenues and pays expenses in local currency. For financial statement
reporting purposes, these accounts are translated into U.S. dollars at the
weighted average exchange rates during the relevant period.
Because the Company conducts substantially all its operations in U.S.
dollars, to the extent the value of the U.S. dollar decreases in relation to the
value of applicable foreign currencies, such decrease potentially could
adversely affect the Company's operating revenues in foreign jurisdictions. To
date, currency fluctuations have not had a material impact on the Company's
financial condition or results of operations. The Company has a policy of
monitoring its foreign currency exposure and has entered into certain hedging
agreements.
AGE OF FLEET
As of June 30, 1997, the average age of the Company's owned offshore marine
service fleet was approximately 14.2 years. The Company believes that after an
offshore supply vessel has been in service for approximately 25 years, the
amount of expenditures (which typically increase with vessel age) necessary to
satisfy required marine certification standards may not be economically
justifiable. If the Company is unable to replace its vessels at the end of their
useful economic lives, the cost of building new vessels could materially
increase the Company's capital expenditures. There can be no assurance that the
Company will be able to maintain its fleet by extending the economic life of
existing vessels or acquiring new or used vessels, or that the Company's
financial resources will be sufficient to enable it to make capital expenditures
for such purposes.
COMPETITION
Both the Company's marine and environmental segments operate in highly
competitive industries. In addition to price, service and reputation, the
principal competitive factors for offshore supply fleets include the existence
of national flag preference, operating conditions and intended use (all of which
determine the suitability of vessel types), complexity of maintaining logistical
support and the cost of transferring equipment from one market to another. See
"--Industry Conditions--Offshore Marine Services; Market Volatility" for other
factors and "Business--Strategy--Offshore Marine Services."
The principal competitive factors in the environmental services business are
price, service, reputation, experience and operating capabilities. The Company
believes that the lack of uniformity of regulatory development and enforcement
on a federal and state level has created a lower barrier of entry in several
market segments which has increased the number of competitors. NRC faces
competition from the Marine Spill Response Corporation (a non-profit corporation
funded by the major integrated oil companies), other industry cooperatives and
also from smaller contractors who target specific market niches.
HOLDING COMPANY STRUCTURE
The Notes will be general unsecured obligations of the Company. The Notes
will not be guaranteed by the Company's subsidiaries and will not be secured by
any assets of such subsidiaries. Because the Company conducts its offshore
marine operations through its operating subsidiaries, the Company's ability
17
<PAGE>
to service its debt obligations, including its ability to pay the principal of
and interest on the Notes, is strictly dependent upon the earnings and cash
flows of its subsidiaries and the ability of these subsidiaries to make funds
available to the Company for such purpose (whether in the form of intercompany
loans, dividends or otherwise). The Company's subsidiaries are distinct legal
entities and have no obligation, contingent or otherwise, to pay any amounts due
pursuant to the Notes or to make any funds available therefor, whether by
dividends, interest, loans, advances or other payments. In addition, the payment
of dividends and the making of loans, advances and other payments to the Company
by its subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business and other considerations.
As a consequence of the Company's holding company structure, the Notes are
effectively subordinated in right of payment to the prior payment in full of all
existing and future obligations and liabilities of the Company's subsidiaries.
Therefore, the claims of creditors of the Company's subsidiaries will, in
respect of the assets of such subsidiaries, have priority over claims of the
Company's creditors (including holders of the Notes). The Indenture will not
restrict or limit the ability of the Company's subsidiaries to incur, assume or
guarantee any indebtedness.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Existing Notes who do not exchange their Existing Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such securities as set forth in the legend thereon
and in the Offering Memorandum dated September 15, 1997, because the Existing
Notes were issued pursuant to exemptions from, or in transactions not subject
to, the registration requirements of the Securities Act and applicable state
securities laws. In general, the Existing Notes may not be offered or sold
unless registered under the Securities Act and applicable state securities laws,
or pursuant to an exemption therefrom, or in a transaction not subject to the
Securities Act and applicable state securities laws. The Company does not intend
to register the Existing Notes under the Securities Act and, after consummation
of the Exchange Offer, will not be obligated to do so except under limited
circumstances. See "The Exchange Offer--Purpose and Effect of the Exchange
Offer." Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties with respect to similar transactions,
including "Exxon Capital Holdings Corporation" (available May 13, 1988) and
Morgan Stanley & Co. Incorporated" (available June 5, 1991) and similar
no-action letters, the Company believes that the Exchange Notes issued pursuant
to the Exchange Offer in exchange for Existing Notes may be offered for resale,
resold or otherwise transferred by holders thereof (other than (i) a
broker-dealer who purchases such Exchange Notes from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities Act,
or (ii) a person that is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
securities are acquired in the ordinary course of such holder's business, such
holders have no arrangement with any person to participate in the distribution
of such securities and neither such holders nor any such other person is
engaging in or intends to engage in a distribution of such securities. Any
holder of Existing Notes who tenders in the Exchange Offer for the purpose of
participating in a distribution of the Exchange Notes may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives
Exchange Notes for its own account in exchange for Existing Notes, where such
Existing Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution" and "The Exchange Offer--Procedures for Tendering." To the extent
the Existing Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Existing Notes could be
adversely affected. See "The Exchange Offer--Purpose and Effect of the Exchange
Offer."
18
<PAGE>
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's
obligations under the Registration Agreement. In consideration for issuing the
Exchange Notes contemplated in this Prospectus, the Company will exchange
Existing Notes (in a like principal amount), the form and terms of which are the
same as the form and terms of such Existing Notes, except as otherwise described
herein. The Existing Notes surrendered in exchange for Exchange Notes will be
retired and canceled and cannot be reissued. Accordingly, issuance of the
Exchange Notes will not result in any increase or decrease in the indebtedness
of the Company. As such, no effect has been given to the Exchange Offer in the
capitalization table. The Company will not receive any proceeds from the
Exchange Offer. The gross proceeds to the Company from the offering of Existing
Notes on September 22, 1997 (the "Existing Notes Offering") were approximately
$148.8 million net of discounts to the Initial Purchasers (before deducting fees
and expenses relating to such Offering). The net proceeds of the Existing Notes
Offering will be used to fund certain anticipated capital expenditures for
vessels and rigs, to pay up to $47.2 million in contractual obligations to Smit
Internationale N.V. ("Smit") and to finance potential acquisitions and joint
ventures. The balance, if any, of the net proceeds will be used for general
corporate purposes. See "Capitalization."
CAPITALIZATION
The following table sets forth the cash and cash equivalents, short-term
borrowings and capitalization of the Company at June 30, 1997, (i) on an
historical basis and (ii) as adjusted to reflect the sale of the Notes offered
hereby for the Existing Notes. The information set forth in the table below
should be read in conjunction with the Consolidated Financial Statements and
notes thereto incorporated by reference in this Prospectus. For additional
information as to the capitalization of the Company, see "Selected Historical
Financial Information" contained herein and Management's Discussion and Analysis
of Financial Condition and Results of Operations and the consolidated financial
statements of the Company and the related notes thereto in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 and its Annual
Report on Form 10-K for the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
AT JUNE 30, 1997
-----------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
---------- -----------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
Cash and Cash Equivalents................................................................ $ 162,213 $ 309,563
---------- -----------
---------- -----------
Short-term Borrowings.................................................................... $ -- $ --
---------- -----------
---------- -----------
Current portion of long-term debt........................................................ $ 1,797 $ 1,797
---------- -----------
Long-term Debt:
7.20% Senior Notes Due 2009............................................................ $ -- $ 148,800
DnB Facility........................................................................... 6,991 6,991
Capital Lease Obligations.............................................................. 21,746 21,746
5 3/8% Convertible Subordinated Notes Due November 15, 2007............................ 187,750 187,750
Other.................................................................................. 600 600
---------- -----------
Total long-term debt................................................................. 217,087 365,887
Minority Interests and Indebtedness to Minority Shareholder.............................. 714 714
Stockholders' Equity:
Common stock, $.01 par value........................................................... 140 140
Additional paid-in capital............................................................. 264,391 264,391
Retained earnings...................................................................... 158,866 158,866
Less 162,768 shares held in treasury, at cost.......................................... (5,137) (5,137)
Less unamortized restricted stock compensation......................................... (1,191) (1,191)
Currency translation adjustments....................................................... (5,926) (5,926)
---------- -----------
Total stockholders' equity........................................................... 411,143 411,143
---------- -----------
Total capitalization................................................................. $ 630,741 $ 778,827
---------- -----------
---------- -----------
</TABLE>
19
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table sets forth selected consolidated income statement and
balance sheet information for each of the five years in the period ended
December 31, 1996, which, in the case of the four-year period ended December 31,
1996, has been derived from consolidated financial statements of the Company
that have been audited by Arthur Andersen LLP, independent public accountants.
The selected consolidated income statement and balance sheet data for the six
months ended June 30, 1996 and 1997 are derived from the Company's unaudited
financial statements. Interim results, in the opinion of management, include all
adjustments (consisting solely of normal recurring adjustments) necessary to
present fairly the financial information for such periods; however, such results
are not necessarily indicative of the results which may be expected for any
other interim period or for a full year. The following data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included in the Company's annual report to
shareholders on Form 10-K for the year ended December 31, 1996 and quarterly
report on Form 10-Q for the quarterly period ended June 30, 1997 and the
Consolidated Financial Statements and the notes thereto each incorporated by
reference in this registration statement. Pro forma financial statements of the
Company are also presented elsewhere in this registration statement. See "Pro
Forma Financial Statements."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30
------------------------------------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
<CAPTION>
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue:
Marine.................................................... $ 74,317 $ 92,168 $ 93,985 $104,894 $193,557 $ 87,736 $154,948
Oil spill response........................................ -- -- -- 8,927 12,466 5,919 1,637
Environmental retainer and other service.................. -- -- -- 12,838 18,421 9,093 7,842
-------- -------- -------- -------- -------- -------- --------
74,317 92,168 93,985 126,659 224,444 102,748 164,427
Costs and Expenses:
Costs of oil spill response............................... -- -- -- 7,643 10,398 5,392 1,562
Operating expenses -
Marine.................................................. 46,775 53,958 55,860 66,205 108,043 50,027 74,879
Environmental........................................... -- -- -- 4,580 6,227 2,764 2,538
Administrative and general................................ 5,211 7,187 7,278 13,953 22,304 11,117 14,115
Depreciation and amortization............................. 12,804 12,107 14,108 18,842 24,967 11,542 17,621
-------- -------- -------- -------- -------- -------- --------
Operating income............................................ 9,527 18,916 16,739 15,436 52,505 21,906 53,712
Net interest expense........................................ 6,728 3,719 3,548 4,098 2,155 2,410 1,080
(Gain)/Loss from equipment sales or retirements............. -- 8 388 (4,076) (2,264) (522) (47,010)
Other (income) expense...................................... 1,197 (122) 267 (228) 104 (310) (443)
McCall acquisition costs.................................... -- -- -- -- 542 472 --
-------- -------- -------- -------- -------- -------- --------
Income before income taxes, minority interest, equity in net
earnings of 50% or less owned companies, and extraordinary
item...................................................... 1,602 15,311 12,536 15,642 51,968 19,856 100,085
Income tax expense.......................................... 652 5,339 4,368 5,510 18,535 7,205 35,203
-------- -------- -------- -------- -------- -------- --------
Income before minority interest, equity in net earnings of
50% or less owned companies, and extraordinary item....... 950 9,972 8,168 10,132 33,433 12,651 64,882
Minority interest in (income) loss of a subsidiary.......... 41 (51) 184 321 244 147 145
Equity in net earnings of 50% or less owned companies....... -- 287 975 872 1,283 441 2,159
-------- -------- -------- -------- -------- -------- --------
Income before extraordinary item............................ 991 10,208 9,327 11,325 34,960 13,239 67,186
Extraordinary item-loss on extinguishment of debt, net (less
applicable income taxes).................................. -- 1,093 -- -- 807 -- (325)
-------- -------- -------- -------- -------- -------- --------
Net income.................................................. $ 991 $ 9,115 $ 9,327 $ 11,325 $ 34,153 $ 13,239 $ 66,861
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Net income per common share -
Assuming no dilution (1).................................. $ 0.19 $ 1.28 $ 1.29 $ 1.48 $ 2.90 $ 1.35 $ 4.81
Assuming full dilution.................................... 0.19 1.22 1.22 1.36 2.67 1.16 4.14
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30
------------------------------------------------ ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF CASH FLOWS DATA:
Cash provided by operating activities..................... $ 15,311 $ 23,416 $ 21,150 $ 9,939 $ 58,737 $ 22,669 $ 39,870
Cash provided by (used in) investing activities........... 6,048 (24,251) (4,855) (78,695) (100,120) (7,511) (20,843)
Cash provided by (used in) financing activities........... 852 17,657 (7,714) 53,291 161,482 (15,766) (5,841)
OTHER FINANCIAL DATA:
EBITDA(2)................................................. $ 24,570 $ 32,366 $ 32,923 $ 35,964 $ 79,730 $ 34,291 $ 74,094
Ratio of earnings to fixed charges(3)....................... 1.21 3.93 3.17 3.18 9.71 6.33 16.74
Ratio of EBITDA to certain fixed charges(4)................. 3.49 6.77 6.07 5.38 13.96 9.93 11.94
BALANCE SHEET DATA (AT PERIOD END):
Cash and temporary investments............................ $ 19,564 $ 36,008 $ 44,637 $ 28,786 $149,053 $ 28,179 $162,213
Total assets.............................................. 181,765 233,511 238,145 350,883 636,455 356,891 720,710
Total long-term debt, including current portion........... 50,653 87,959 79,517 111,095 220,452 94,812 218,884
Stockholders' equity...................................... 89,639 100,532 111,482 183,464 351,071 196,886 411,143
</TABLE>
- ------------------------
(1) 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 thereto which does not require the inclusion of
Common Stock equivalents in the earnings per share calculation if the
dilutive effect is less than 3%.
(2) As used herein, "EBITDA" is operating income plus depreciation and
amortization, amortization of deferred mobilization costs, which is included
in marine operating expenses, minority interest in (income) loss of
subsidiary and equity in net earnings of 50% or less owned companies, before
applicable income taxes. EBITDA should not be considered by an investor as
an alternative to net income as an indicator of the Company's operating
performance or as an alternative to cash flows or ratio of earnings to fixed
changes as a measure of liquidity.
(3) This computation is submitted in accordance with Regulation S-K Item 503(d).
Earnings are computed as Income Before Income Taxes, Minority Interest,
Equity in Earnings of 50% or Less Owned Companies, and Extraordinary Item
plus fixed charges and Minority Interest in Income of Subsidiary. Fixed
charges are computed as interest, whether expensed or capitalized,
amortization of debt expense and discount and the portion of rental expense
representative of interest.
(4) As used herein, the ratio of EBITDA to certain fixed charges is EBITDA
divided by interest, whether expensed or capitalized, exclusive of
amortization of debt expense and discount. The ratio of EBITDA to certain
fixed charges should not be considered by an investor as an alternative to
cash flows as a measure of liquidity.
21
<PAGE>
PRO FORMA FINANCIAL STATEMENTS
The pro forma financial statements presented below reflect the effects of
adjustments to the Consolidated Financial Statements and notes thereto
incorporated by reference in this registration statement necessary to give pro
forma effect to certain transactions described below as if such transactions had
occurred on January 1, 1996.
The pro forma financial statements of the Company and accompanying notes
should be read in conjunction with the Consolidated Financial Statements and
notes thereto and the unaudited financial statements of the Company for the six
months ended June 30, 1997 incorporated by reference in this Registration
Statement.
Management believes that the assumptions used provide a reasonable basis on
which to present the pro forma financial data. The pro forma financial
statements are provided for information purposes only and should not be
construed to be indicative of the Company's results of operations or financial
position had the transactions described below been consummated on or as of the
dates assumed, and are not intended to project the Company's results of
operations or its financial position for any future period or as of any future
date.
The pro forma adjustments give effect to the 6.0% Note Conversion, the 1996
Common Stock Offering, the 1996 CNN Transaction (including the issuance of
156,650 shares of Common Stock upon conversion of the 2.5% Notes), and the Smit
Transaction in each case as if such transactions occurred on January 1, 1996.
22
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
CONVERTIBLE
JULY 1996 NOTES SMIT
TRANSACTIONS PLACEMENT TRANSACTION
HISTORICAL NOTE B NOTE C NOTE D PRO FORMA
------------ ----------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Operating Revenue:
Marine........................... $193,557,000 $ -- $ -- $63,865,000(7) $257,422,000
Environmental--
Oil spill response............. 12,466,000 -- -- -- 12,466,000
Retainer and other services.... 18,421,000 -- -- -- 18,421,000
------------ ----------------- ------------- -------------- ------------
224,444,000 -- -- 63,865,000 288,309,000
------------ ----------------- ------------- -------------- ------------
Costs and Expenses:
Cost of oil spill response....... 10,398,000 -- -- -- 10,398,000
Operating expenses--
Marine......................... 108,043,000 -- -- 40,296,000(7) 148,339,000
Environmental.................. 6,227,000 -- -- -- 6,227,000
Administrative and general....... 22,304,000 -- -- 9,421,000(7)
(5,742,000)(8) 25,983,000
Depreciation and amortization.... 24,967,000 (211,000)(1) -- 11,088,000(7)
-- -- (2,594,000)(9) 33,250,000
------------ ----------------- ------------- -------------- ------------
171,939,000 (211,000) -- 52,469,000 224,197,000
------------ ----------------- ------------- -------------- ------------
Operating Income................... 52,505,000 211,000 -- 11,396,000 64,112,000
------------ ----------------- ------------- -------------- ------------
Other Income (Expense):
Interest on Debt................. (5,713,000) 4,048,000(1)(2) (9,698,000)(5) (2,063,000)(10) (13,426,000)
Interest Income.................. 3,558,000 -- -- -- 3,558,000
Gain (loss) from equipment sales
or retirements................. 2,264,000 -- -- -- 2,264,000
Other............................ (646,000) -- -- -- (646,000)
------------ ----------------- ------------- -------------- ------------
(537,000) 4,048,000 (9,698,000) (2,063,000) (8,250,000)
------------ ----------------- ------------- -------------- ------------
Income Before Income Taxes,
Minority
Interest, Equity in Net Earnings
of 50% or Less Owned Companies
and Extraordinary Item......... 51,968,000 4,259,000 (9,698,000) 9,333,000 55,862,000
Income Tax Expense (Benefit)....... 18,535,000 1,448,000(3) (3,394,000)(6) 3,267,000(11) 19,856,000
------------ ----------------- ------------- -------------- ------------
Income Before Minority Interest,
Equity in Net Earnings of 50% or
Less Owned Companies and
Extraordinary Item............... 33,433,000 2,811,000 (6,304,000) 6,066,000 36,006,000
Minority Interest in Income (Loss)
of a Subsidiary.................. 244,000 -- -- -- 244,000
Equity in Net Earnings of 50% or
Less Owned Companies............. 1,283,000 -- -- 933,000(7)
(327,000)(11) 1,889,000
------------ ----------------- ------------- -------------- ------------
Income before Extraordinary Item... 34,960,000 2,811,000 (6,304,000) 6,672,000 38,139,000
Extraordinary Item-Loss on
Extinguishment of Debt........... (807,000) -- -- -- (807,000)
------------ ----------------- ------------- -------------- ------------
Net Income......................... $ 34,153,000 $2,811,000 $(6,304,000) 6,672,000 37,332,000
------------ ----------------- ------------- -------------- ------------
------------ ----------------- ------------- -------------- ------------
Earnings Per Common Share--
Assuming no Dilution
Income before extraordinary
item........................... $ 3.03 -- -- -- $ 2.72
Extraordinary Item............... (0.07) -- -- -- (0.06)
------------ ----------------- ------------- -------------- ------------
Net Income......................... $ 2.96 -- -- -- $ 2.66
Earnings Per Common Share--
Assuming Full Dilution
Income before extraordinary
item........................... $ 2.73 -- -- -- $ 2.66
Extraordinary Item............... (0.06) -- -- -- (0.05)
------------ ----------------- ------------- -------------- ------------
Net Income......................... $ 2.67 -- -- -- $ 2.61
Weighted Average Common Shares:
Assuming no dilution............... 11,533,198 -- -- -- 14,037,057
Assuming full dilution............. 13,568,933 -- -- -- 16,911,369
</TABLE>
23
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONVERTIBLE
JULY 1996 NOTES SMIT
TRANSACTIONS PLACEMENT TRANSACTION
HISTORICAL NOTE B NOTE C NOTE D PRO FORMA
----------- ------------- -------------- -------------- -------------
Operating Revenue:
Marine........................... $87,736,000 $ -- $ -- $32,169,000(7) $ 119,905,000
Environmental--
Oil spill response............. 5,919,000 -- -- -- 5,919,000
Retainer and other services.... 9,093,000 -- -- -- 9,093,000
----------- ------------- -------------- -------------- -------------
102,748,000 -- -- 32,169,000 134,917,000
----------- ------------- -------------- -------------- -------------
Costs and Expenses:
Cost of oil spill response....... 5,392,000 -- -- -- 5,392,000
Operating expenses--
Marine......................... 50,027,000 -- -- 20,298,000(7) 70,325,000
Environmental.................. 2,764,000 -- -- -- 2,764,000
Administrative and general....... 11,117,000 -- -- 4,745,000(7)
(2,901,000)(8) 12,961,000
Depreciation and amortization.... 11,542,000 (105,000)(1) -- 5,586,000(7) 15,684,000
(1,339,000)(9)
----------- ------------- -------------- -------------- -------------
80,842,000 (105,000) -- 26,389,000 107,126,000
----------- ------------- -------------- -------------- -------------
Operating Income................... 21,906,000 105,000 -- 5,780,000 27,791,000
----------- ------------- -------------- -------------- -------------
Other Income (Expense):
Interest on Debt................. (3,452,000) 2,079,000(1)(2) (4,852,000)(5) (1,041,000)(10) (7,266,000)
Interest Income.................. 1,042,000 -- -- -- 1,042,000
Gain (loss) from equipment sales
or retirements................. 522,000 -- -- -- 522,000
McCall acquisition costs......... -- -- -- -- --
Other............................ (162,000) -- -- -- (162,000)
----------- ------------- -------------- -------------- -------------
(2,050,000) 2,079,000 (4,852,000) (1,041,000) (5,864,000)
----------- ------------- -------------- -------------- -------------
Income Before Income Taxes,
Minority Interest, Equity in Net
Earnings of 50% or Less Owned
Companies and Extraordinary
Item............................. 19,856,000 2,184,000 (4,852,000) 4,739,000 21,927,000
Income Tax Expense (Benefit)....... 7,205,000 764,000(3) (1,698,000)(6) 1,659,000(11) 7,930,000
----------- ------------- -------------- -------------- -------------
Income Before Minority Interest,
Equity in Net Earnings of 50% or
Less Owned Companies and
Extraordinary Item............... 12,651,000 1,420,000 (3,154,000) 3,080,000 13,997,000
Minority Interest in Income (Loss)
of a Subsidiary.................. 147,000 -- -- -- 147,000
Equity in Net Earnings of 50% or
Less Owned Companies............. 441,000 -- -- 470,000(7) 746,000
(165,000)(11)
----------- ------------- -------------- -------------- -------------
Income before Extraordinary Item... 13,239,000 1,420,000 (3,154,000) 3,385,000 14,890,000
Extraordinary Item-Loss on
Extinguishment of Debt........... -- (861,000)(4) -- -- (861,000)
----------- ------------- -------------- -------------- -------------
Net Income......................... $13,239,000 $ 559,000 $(3,154,000) $3,385,000 14,029,000
----------- ------------- -------------- -------------- -------------
----------- ------------- -------------- -------------- -------------
Earnings Per Common Share--
Assuming no Dilution:
Income before extraordinary
item........................... $ 1.35 $ 1.06
Extraordinary Item............... -- (0.06)
----------- -------------
Net Income......................... $ 1.35 $ 1.00
----------- -------------
----------- -------------
Earnings Per Common Share--
Assuming Full Dilution:
Income before extraordinary
item........................... $ 1.16 $ 1.06
Extraordinary Item............... -- (0.06)
----------- -------------
Net Income......................... $ 1.16 $ 1.00
----------- -------------
----------- -------------
Weighted Average Common Shares:
Assuming no dilution............... 9,835,707 14,005,385
Assuming full dilution............. 12,419,836 14,041,078
</TABLE>
24
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
As discussed in the Company's annual report to shareholders on Form 10-K for
the year ended December 31, 1996, the Company completed several transactions
during 1996 (the 6.0% Note Conversion, the 1996 CNN Transaction, the 1996 Common
Stock Offering (collectively, the "July 1996 Transactions"), the Convertible
Notes Placement, and the Smit Transaction).
The accompanying pro forma condensed consolidated statements of income for
the year ended December 31, 1996 and for the six months ended June 30, 1996 have
been prepared based upon certain pro forma adjustments to historical financial
information, assuming (i) the July 1996 Transactions, (ii) the Convertible Notes
Placement, and (iii) the Smit Transaction, in each case occurred on January 1,
1996. No pro forma adjustments were made to the statements of income with
respect to operating revenues and expenses for the 1996 CNN Transaction because
the effect of such adjustments would not be material.
The pro forma data are not necessarily indicative of the operating results
or financial position that would have occurred had the above described
transactions been consummated at the dates indicated, nor necessarily indicative
of future operating results or financial position.
The weighted averages of common shares used to calculate pro forma
consolidated earnings per share, assuming no dilution, are based on the actual
weighted average number of shares outstanding during each period, adjusted to
give effect to shares issued in connection with the July 1996 Transactions and
the Smit Transaction, assuming that the transactions had taken place on January
1, 1996 and for additional shares assumed to be outstanding to reflect the
dilutive effect of common stock equivalents using the treasury stock method. The
weighted average of common shares used to calculate pro forma consolidated
earnings per share, assuming full dilution, for the year ended December 31, 1996
is based on the actual weighted average number of shares outstanding during the
period, adjusted to give effect to the July 1996 Transactions and the Smit
Transaction and for additional shares assumed to be outstanding to reflect the
dilutive effect of common stock equivalents using the treasury stock method and
the assumption that the 5 3/8% Convertible Subordinated Notes issued in the
Convertible Notes Placement and the Smit Transaction were converted into common
stock. Net income has been adjusted for the interest expense (net of income tax)
associated with the convertible subordinated notes. The weighted average of
common shares used to calculate pro forma consolidated earnings per share,
assuming full dilution, for the six months ended June 30, 1996, was calculated
on the same basis except that the effect of the conversion of the 5 3/8%
Convertible Subordinated Notes into Common Stock is not considered in the
calculation of earnings per share assuming full dilution because the effect is
antidilutive.
B. JULY 1996 TRANSACTIONS
6.0% NOTE CONVERSION
On June 6, 1996, the Company notified the Trustee of the 6.0% Notes of its
election to call the 6.0% Notes for redemption on July 12, 1996. Holders of the
6.0% Notes had the right to convert the 6.0% Notes into shares of Common Stock
at a ratio of 39.024 shares of Common Stock per $1,000 principal amount of the
6.0% Notes (representing a conversion price of $25.625 per share) prior to the
date of redemption. Upon conversion, 2,156,083 shares of Common Stock were
issued. The following adjustment reflects the assumed conversion of the entire
principal amount outstanding of the 6.0% Notes:
(1) To reflect the reductions in interest expense and the amortization of
debt issuance costs as a result of the conversion.
25
<PAGE>
SEACOR SMIT INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. JULY 1996 TRANSACTIONS (CONTINUED)
1996 CNN TRANSACTION
(2) To reflect the reduction in interest expense due to the retirement of
indebtedness outstanding with a portion of the net proceeds from the 1996 Common
Stock Offering.
(3) To adjust income tax expense for the effect of the adjustments described
in notes (1) and (2) assuming an effective tax rate of 35%.
(4) To reflect an extraordinary loss in the six-month period ended June 30,
1996 due to the write-off of unamortized debt discount relating to the early
repayment of $9.6 million of indebtedness outstanding to CNN, net of income tax
benefits.
C. CONVERTIBLE NOTES PLACEMENT
These adjustments reflect the completion of the 5 3/8% Convertible
Subordinated Notes Offering. The detail of these adjustments is as follows:
(5) To reflect the increase in interest expense due to the sale of $172.5
million principal amount of the 5 3/8% Convertible Subordinated Notes and the
amortization of deferred financing costs.
(6) To adjust income tax expense for the effect of the adjustment described
in note (5) assuming an effective tax rate of 35%.
D. SMIT TRANSACTION
For the purpose of the pro forma adjustments with respect to the operations
of Smit, the revenues and expenses of these operations are translated from Dutch
guilders to U.S. dollars at the weighted average currency exchange rates during
the applicable reporting periods.
(7) To reflect the operating revenues and expenses and equity in net
earnings of 50% or less owned entities attributable to the Smit assets acquired.
(8) To adjust administrative and general expenses associated with the
acquired assets to reflect the Company's budget for these operations.
(9) To reflect depreciation associated with the acquired assets relative to
such expense as reported by Smit. The Company recorded the acquired assets at
their fair market values in accordance with the purchase method of accounting.
Consistent with the Company's depreciation policies, the depreciable lives
assigned to each of the vessels acquired in the Smit Transaction were determined
by subtracting from 25 years the period from each vessel's original construction
date to its acquisition date.
(10) To reflect an increase in interest expense due to the issuance of
$15.25 million principal amount of Smit Notes and payments under capital lease
obligations.
(11) To adjust income tax expense for the effect of the adjustments
described in notes (7) through (10) assuming an effective tax rate of 35%.
26
<PAGE>
THE COMPANY
The Company is a major provider of offshore marine services to the oil and
gas exploration and production industry and is one of the leading providers of
oil spill response services to owners of tank vessels and oil storage,
processing and handling facilities. As of June 30, 1997, the Company operated a
diversified fleet of 306 vessels primarily dedicated to servicing offshore oil
and gas exploration and production facilities in the U.S. Gulf of Mexico, the
North Sea, offshore West Africa, Mexico, the Far East, Latin America and the
Mediterranean. Additionally, the recent consummation of the acquisition of
assets, including certain vessels owned by Galaxie Marine Service, Inc.,
Moonmaid Marine, Inc., Waveland Marine Service, Inc. and Triangle Marine Inc.,
as well as a vessel construction contract, has enlarged the Company's fleet
capacity in the U.S. Gulf of Mexico. The Company's offshore service vessels
deliver cargo and personnel to offshore installations, handle anchors for
drilling rigs and other marine equipment, support offshore construction and
maintenance work and provide standby safety support. The Company also furnishes
vessels for special projects such as well stimulation, seismic data gathering,
freight hauling and line handling. In connection with its offshore marine
services, the Company, through Energy Logistics, Inc., a joint venture with
Baker Energy, a unit of the Michael Baker Corporation, a U.S. public company,
also offers logistics services for the offshore industry, including the
coordination and provision of marine, air and land transportation, materials
handling and storage, inventory control and "just-in-time" procurement.
The Company's environmental services business principally provides
contractual oil spill response services to entities who store, transport,
produce or handle petroleum and certain other non-petroleum oils as required by
OPA 90 and various state regulations. The Company's services, provided primarily
through its indirect wholly-owned subsidiary, NRC, also include training for and
supervision of activities in response to oil spill emergencies and the
maintenance of specialized equipment for immediate deployment and spill
response. NRC has acted as the principal oil spill response contractor on
several of the largest oil spills that have occurred in the United States since
the enactment of OPA 90.
In August 1997, SEACOR Rigs, a wholly-owned subsidiary of SEACOR, invested
approximately $9.0 million in exchange for a 50% interest in Chiles, a joint
venture and strategic alliance created to manage and invest in partnerships
which will construct, own and operate two premium jackup drilling rigs, which
have been contracted for delivery in 1999. The Company believes that this
business is complementary to SEACOR's marine transportation and logistics
business. SEACOR Rigs anticipates contributing an additional $26.0 million as a
limited partner in such partnerships, partially funding rig construction.
Estimated total project costs of approximately $160.0 million may be funded, in
part, through the sale of units in the rig-owning partnerships. It is
anticipated that SEACOR Rigs will initially own 80% of these partnerships
through its 50% equity holding in Chiles and its direct investment in the
rig-owning partnerships; however, the Company anticipates reducing its ownership
interests through the possible sale of partnership units. On September 8, 1997,
Chiles entered into a letter of intent for the construction of two additional
premium jackup drilling rigs. Estimated total project costs for each rig would
be approximately $92.0 million. The Company does not presently intend to fund
any portion of such costs. The transaction is contingent upon the preparation,
negotiation and execution of definitive documentation and Chiles' ability to
obtain financing therefor by December 7, 1997. Consequently, there can be no
assurance that such transaction will be consummated.
SEACOR's principal executive offices are located at 11200 Westheimer, Suite
850, Houston, Texas 77042, where its telephone number is (713) 782-5990.
27
<PAGE>
BUSINESS
STRATEGY
The Company's strategy is to identify and pursue opportunities for growth,
development and integration of its offshore marine, environmental services and
other related marine and energy businesses. In its offshore marine services
business, the Company seeks to be innovative in meeting the long-term needs of
its customers while managing the short-term challenges characteristic of a
cyclical, global and capital-intensive business. In its environmental services
business, the Company seeks to provide value-added services to its customers in
the most cost-efficient manner by capitalizing on its knowledge and experience
in planning for and responding to oil spill emergencies, its diversified fleet
of offshore marine service vessels and its extensive network of independent
contractors. A key element of the Company's strategy is the acquisition of
assets or businesses which expand the Company's markets, customer base and
services. The Company seeks to develop "total" customer relationships by meeting
its customers' vessel and environmental services needs on a global basis.
OFFSHORE MARINE SERVICES
The Company's strategy is to pursue growth opportunities while balancing its
exposure to the cyclical nature of the oil and gas exploration and production
industry. The Company implements this strategy by:
DIVERSIFYING GEOGRAPHICALLY. The Company seeks to expand its presence in
multiple markets and thereby enhance asset utilization by enabling it to deploy
vessels to different geographic regions to take advantage of cyclical market
opportunities and better service its customers' global operations.
MAINTAINING A BALANCE BETWEEN LONG-TERM AND SHORT-TERM CHARTERS. The
Company seeks to maintain a balance between long-term charters (i.e., those
having a duration of one year or more from inception), which increase asset
utilization, enhance the predictability of cash flows and facilitate the
development of lasting customer relationships, and short-term charters, which
provide the Company with the flexibility to take advantage of improving market
conditions and opportunities in different markets.
BROADENING THE MIX OF VESSELS. The Company maintains a diversified fleet of
vessels which enables it to service a broad range of customer requirements and
provide services to both the exploration and production sectors of the energy
industry.
OFFERING SPECIALIZED SERVICES. The Company seeks to meet its customers'
needs through efficient use of vessels and logistical systems. In conjunction
with this strategy, the Company has modified and converted vessels for special
projects such as well stimulation, seismic data gathering, standby safety
support and freight hauling.
ENVIRONMENTAL SERVICES
In its environmental services business, the Company's strategy is to balance
its exposure to the event-driven nature of its marine spill response business by
expanding its core OPA 90 business and developing and promoting ancillary
environmental services. The Company implements this strategy by:
EXPANDING ITS SERVICES. The Company is committed to pursuing new customer
relationships and expanding its services by identifying, developing and
providing services ancillary to the requirements of OPA 90. Ancillary services
include environmental training programs, standby oil spill response services and
planning for oil spill response drills.
EXPANDING INTERNATIONALLY. The Company seeks to develop its oil spill
response and ancillary services businesses internationally by capitalizing on
its knowledge and experience, existing customer relationships and rapid
equipment deployment capability.
28
<PAGE>
DIVERSIFYING ITS CUSTOMER BASE. The Company seeks to expand its sources of
retainer revenues by actively marketing its environmental services to vessel
owners, facilities and others who must comply with various state and federal
planning regulations but who are not covered by the requirements of OPA 90.
MAINTAINING A COST-EFFECTIVE SPILL RESPONSE NETWORK. The Company maintains
a highly efficient and cost-effective spill response network by coordinating and
managing existing resources and supplementing them with a variety of
purpose-built equipment. The Company's network of approximately 53 independent
spill response contractors stores and maintains NRC's equipment in a constant
state of preparedness and provides trained personnel and resources in the event
of a spill.
OTHER RELATED BUSINESSES
The Company seeks acquisition and investment opportunities in other related
marine and energy businesses that are complementary to the Company's current
operations, such as its August 1997 investment in Chiles.
OFFSHORE MARINE SERVICES
GEOGRAPHIC MARKETS SERVED
The operations of the Company's offshore marine services business are
concentrated in five geographic markets: the United States (principally, the
U.S. Gulf of Mexico), offshore West Africa, the North Sea, the Far East and
Latin America. The table below sets forth, at the dates indicated, the number of
vessels operated directly by the Company or through its joint ventures and
pooling arrangements in each geographic market. Prior to 1996, the information
contained in the table has been restated to include vessels purchased in the
McCall Acquisition (as defined in "1996 Transactions").
<TABLE>
<CAPTION>
AT DECEMBER 31, AT JUNE 30,
---------------------
<S> <C> <C> <C> <C>
GEOGRAPHIC MARKET 1994 1995 1996(1) 1997(2)
- ------------------------------ ---- ---- ------- -----------
Domestic...................... 79 194 175(3) 191(3)
---- ---- ------- -----
Foreign:
Offshore West Africa........ 20 27 34 33
North Sea................... 11 15 34 35
Far East.................... -- -- 19 17
Latin America............... 10 10 12 18
Other(4).................... 4 3 12 12
---- ---- ------- -----
Total Foreign............. 45 55 111 115
---- ---- ------- -----
Total Fleet............. 124 249 286 306(3)
---- ---- ------- -----------
---- ---- ------- -----------
</TABLE>
- ------------------------
(1) Includes 45 vessels acquired pursuant to the Smit Transaction (See "1996
Transactions").
(2) The increase following December 31, 1996 primarily relates to the Galaxie
Transaction (See "Summary--The Company").
(3) Excludes 13 oil spill response vessels.
(4) Includes vessels operating primarily in the Middle East and the
Mediterranean.
DOMESTIC. The Company is a major provider of offshore marine services to
the oil and gas exploration and production industry that operates primarily in
the U.S. Gulf of Mexico. Exploration activity, including recent trends to drill
in deeper water in the U.S. Gulf of Mexico, is generally supported by larger
supply, towing supply and anchor handling towing supply vessels. At June 30,
1997, the Company operated 27 of approximately 300 of these larger vessels
currently in the U.S. Gulf of Mexico. Production activity is supported by
similar vessels as well as smaller crew and utility vessels. At June 30, 1997,
the Company operated 157 of approximately 400 estimated crew and utility vessels
in the U.S. Gulf of Mexico.
29
<PAGE>
The Company also operated four specially equipped vessels for customers who
provide well stimulation, seismic data gathering and freight services from shore
bases primarily in the U.S. Gulf of Mexico region.
Exploration and drilling activity in the U.S. Gulf of Mexico, which affects
the demand for vessels, is largely a function of the short-term and long-term
trends in the levels of oil and gas prices. Demand for vessels in the U.S. Gulf
of Mexico has increased recently due to increased drilling activity associated
with natural gas exploration and production, deepwater drilling and rig workover
projects. There can be no assurance that this trend will continue.
OFFSHORE WEST AFRICA. The Company is one of the largest operators serving
the West African coast. At June 30, 1997, the Company owned 32 and chartered-in
one vessel of the approximately 200 offshore support vessels working in this
market. The number of operators is more concentrated in this market as compared
to the U.S. Gulf of Mexico in that four companies operate almost 90% of the
vessels currently active in the region.
The need for offshore support vessels in this market is primarily dependent
upon multi-year offshore oil and gas exploration and development projects and
production support. The demand for vessels in offshore West Africa has increased
over the past year. However, the region is highly dependent on the level of
activity in Nigeria, and recent political developments could have an adverse
effect on exploration and development activity, which in turn would adversely
impact the Company's operations in this market.
NORTH SEA. The Company provides standby safety, supply, towing supply and
anchor handling towing supply services to customers in the North Sea.
At June 30, 1997, there were approximately 150 vessels certified to provide
standby safety services in the North Sea and the Company owns and operates 22 of
these vessels. Twelve additional standby safety vessels are marketed by the
company or its managing agent under pooling arrangements with U.K. companies.
See "--Joint Ventures and Pooling Arrangements." Demand in this market for
standby safety service developed in 1992 after the United Kingdom promulgated
increased safety legislation requiring offshore operations to maintain standby
safety vessels. The legislation generally requires a vessel to "stand by" to
provide a means of evacuation and rescue for platform and rig personnel in the
event of an emergency at an offshore installation. The Company believes that it
was one of the first companies to convert its existing vessels for use as
standby safety service vessels. Demand for standby safety vessels in the North
Sea declined steadily over the last two years as drilling activity was scaled
back due to a decline in oil prices, tax laws changes and a surplus of certified
vessels. Since mid-1995, however, demand has improved with increased exploration
activity, stimulated in part by updated exploration technology and the
development of new drilling areas west of the Shetland Islands. There can be no
assurance, however, that this trend will continue.
The Smit Transaction (as defined in "1996 Transactions") has allowed the
Company to expand its North Sea operations and, at June 30, 1997, 13 of the
approximately 185 offshore support vessels working in this market were owned by
the Company. Eight vessels are working on the Netherlands' Continental Shelf and
five are operating in the U.K. sector of the North Sea. For the remainder of
1997 and 1998, drilling activity in the North Sea is forecasted to increase and
89 mobile drilling rigs are projected to operate near capacity. Presently, there
are 20 offshore support vessels under construction in Norway that are expected
to add significant vessel capacity to the North Sea market in 1997 and 1998. It
is not certain if these new vessels will negatively affect existing rates per
day worked and utilization in the North Sea or possibly stimulate the migration
of older offshore support vessels to other regions.
FAR EAST. At June 30, 1997, the Company operated 12 anchor handling towing
supply vessels, four towing supply vessels and one seismic data gathering vessel
in this region, of which ten were owned by joint venture corporations. At June
30, 1997, there were approximately 275 offshore support vessels owned by ten
companies supporting both exploration and production activities in approximately
16 countries in the Far East. Exploration activity, occurring in both shallow
and deep water areas, has been increasing and
30
<PAGE>
continued improvement is expected. At present, vessels with high horsepower or
vessels capable of assisting with offshore construction are in high demand.
Production activity has improved and, although there can be no assurance, demand
for smaller offshore marine service vessels as operated by the Company in the
U.S. Gulf of Mexico is anticipated to increase.
LATIN AMERICA. The Company provides offshore marine services in Latin
America for both exploration and production activities. At June 30, 1997, 12 of
the Company's 18 vessels operating in this region worked in Mexico, and the
remaining six vessels worked in the Caribbean, Trinidad and South America. At
June 30, 1997, there were approximately 80 offshore support vessels operated in
Mexico. All of the Company's vessels working in Mexico were owned and operated
by a joint venture with Transportacion Maritima Mexicana S.A. de C.V., a Mexican
corporation ("TMM"). See "--Joint Ventures and Pooling Arrangements."
While operating conditions in Mexico are, in many respects, similar to those
in the U.S. Gulf of Mexico, demand for offshore support vessels in Mexico
historically has been affected to a significant degree by Mexican government
policies, particularly those relating to Petroleos Mexicanos ("PEMEX"), the
Mexican national oil company. Offshore exploration and production activity has
been down for most of the past year as a result of political and fiscal changes.
Although there can be no assurance, the Company anticipates that these changes
will result in increased exploration and production maintenance activity in
future periods.
FLEET
The offshore marine service industry supplies vessels to owners and
operators of offshore drilling rigs and production platforms. Two of the largest
groups of offshore support vessels which the Company operates are crew boats,
which transport personnel and small loads of cargo when expedited deliveries are
required, and utility boats, which support offshore production by delivering
general cargo and facilitating infield transportation of personnel and
materials. Two other significant classes of vessels operated by the Company are
towing supply and anchor handling towing supply vessels. These vessels have more
powerful engines, a deck mounted winch and are capable of towing and positioning
offshore drilling rigs as well as providing supply vessel services. The Company
also operates supply vessels, which transport drill pipe, drilling fluids and
construction materials, special service vessels, which include well stimulation,
seismic data gathering, line handling, freight, oil spill response and standby
safety vessels. As of June 30, 1997, the average age of the Company's owned
offshore marine fleet was approximately 14.2 years.
The following table sets forth, at the dates indicated, certain summary
fleet information for the Company. Prior to 1996, the information contained in
the table has been restated to include vessels acquired in May 1996.
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------- AT JUNE 30,
TYPE OF VESSEL 1994 1995 1996(1) 1997(2)
- ------------------------------ ---- ---- ------- -----------
<S> <C> <C> <C> <C>
Crew.......................... 38 77 77 82
Supply and Towing Supply...... 46 52 70 73
Utility and Line Handling..... 9 86 70 87
Anchor Handling Towing
Supply...................... 11 10 37 38
Standby Safety................ 11 15 22 22
Geophysical, Freight and
Other....................... 9 9 10 4
---- ---- ------- -----
Total Fleet............... 124 249 286 306(3)
---- ---- ------- -----
---- ---- ------- -----
</TABLE>
- ------------------------
(1) Includes 45 vessels acquired pursuant to the Smit Transaction. See "1996
Transactions."
(2) The increase following December 31, 1996 primarily relates to the Galaxie
Transaction. See "Summary--The Company."
(3) Excludes 13 oil spill response vessels but includes 256 offshore marine
service vessels owned by the Company and 50 offshore marine service vessels
that are not owned by the Company. Of the 50 offshore marine service vessels
that are not 100% Company-owned, 33 are owned by joint venture corporations
in which the Company has an equity interest, 12 are operated under pooling
arrangements with Company-owned vessels, and five are bareboat or time
chartered-in by the Company for use in its operations.
31
<PAGE>
The Company actively monitors opportunities to buy or sell vessels that will
maximize the overall utility and flexibility of its fleet structures. Presently,
the Company has entered into arrangements to sell seven vessels for a total of
approximately $38.0 million to two leasing companies and lease back the same for
a period of three years. These transactions are true operating leases and are
scheduled to close towards the end of the fourth quarter of 1997.
The Company's operating revenue is affected by 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.
The table below sets forth rates per day worked and utilization data for the
Company during the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------- SIX MONTHS ENDED
1994 1995 1996 JUNE 30, 1997
--------- --------- --------- -----------------
<S> <C> <C> <C> <C>
Rates Per Day Worked: (1)(2)
Supply/Towing Supply.................................. $ 3,254 $ 3,198 $ 4,479 $ 6,069
Anchor Handling Towing Supply......................... 5,322 4,960 6,482 9,738
Crew.................................................. 1,420 1,529 1,726 2,114
Standby Safety........................................ 4,687 4,378 4,884 5,669
Utility/Line Handling................................. 1,260 1,126 1,152 1,327
Project and Geophysical/Freight....................... 3,801 4,010 4,289 4,692
Overall Fleet....................................... 2,731 2,376(3) 2,565 3,422
Overall Utilization: (1)
Supply/Towing Supply.................................. 81.6% 83.9% 94.5% 93.1%
Anchor Handling Towing Supply......................... 84.5 80.1 93.1 82.5
Crew.................................................. 91.4 96.9 97.8 97.6
Standby Safety........................................ 87.0 82.1 85.8 91.6
Utility/Line Handling................................. 87.4 73.0 81.4 97.5
Project and Geophysical/Freight....................... 94.6 89.2 99.1 95.0
Overall Fleet....................................... 87.9 86.1 90.8 95.0
</TABLE>
- ------------------------
(1) Rates per day worked is the ratio of total charter revenue to the total
number of vessel days worked. Rates per day worked and overall utilization
figures exclude owned vessels that are bareboat and time chartered-out,
vessels owned by corporations that participate in pooling arrangements with
the Company, joint venture vessels and managed/operated vessels and include
vessels that are bareboat and time chartered-in by the Company.
(2) Certain of the Company's vessels earn revenue in foreign currencies which
have been converted to U.S. dollars for reporting purposes at the weighted
average exchange rates of those foreign currencies for the periods
indicated.
(3) The decline in the overall fleet's average rate per day worked for the year
ended December 31, 1995 was due primarily to the addition of a large number
of crew and utility vessels acquired in 1995. Crew and utility vessels earn
substantially lower rates per day worked than the other types of vessels in
the Company's fleet but also have substantially lower costs. Thus,
management believes that the comparative rates per day worked amount is not
necessarily indicative of operating income performance.
32
<PAGE>
The table below sets forth the Company's marine fleet structure at the dates
indicated:
<TABLE>
<CAPTION>
AT JUNE 30,
-------------
FLEET STRUCTURE 1997 1996
----- -----
<S> <C> <C>
Owned.................................. 256 226
Bareboat and Time Chartered-in(1)...... 5 3
Joint Ventured(2)...................... 33 10
Pooled(3).............................. 12 5
--- ---
Overall Fleet........................ 306 244
--- ---
--- ---
</TABLE>
- ------------------------
(1) A bareboat charter is a vessel lease under which the entity chartering-in a
vessel is typically responsible for all crewing, insurance, and operating
expenses, as well as the payment of bareboard charter hire to the vessel
owner. A time charter is a vessel lease under which the entity providing the
vessel is responsible for all crewing, insurance, and operating expenses. At
June 30, 1997, the Company bareboat chartered-in two vessels and time
chartered-in three vessels. At June 30, 1996, the Company bareboat
chartered-in two vessels and time chartered-in one vessel.
(2) 1997 and 1996 include twelve and ten vessels, respectively, owned by a joint
venture between TMM and the Company. 1997 also includes 21 vessels owned by
corporations in which the Company acquired an equity interest pursuant to a
transaction with Smit Internationale N.V. ("Smit") in December 1996.
(3) 1997 and 1996 include five vessels owned by Toisa Ltd. which participate in
a pool with ten Company-owned North Sea standby safety vessels.
Additionally, 1997 includes seven standby safety vessels in which the
Company shares net operating profits after certain adjustments with Toisa
and owners of the vessels.
JOINT VENTURES AND POOLING ARRANGEMENTS
The Company has formed or acquired interests in joint ventures and entered
into pooling arrangements with various third parties to enter new markets,
enhance its marketing capabilities and facilitate operations in certain foreign
markets. These arrangements allow the Company to expand its fleet and minimize
the risks and capital outlays associated with independent fleet expansion. The
principal joint venture and pooling arrangements in which the Company
participates are described below:
VEESEA JOINT VENTURE. Standby safety vessels operated by the Company in the
North Sea are owned by a subsidiary of the Company, VEESEA Holdings, Inc.
("VEESEA Holdings") and its subsidiaries (collectively, "VEESEA"). All standby
safety vessels operated by the Company in the North Sea are managed under an
arrangement with Vector Offshore Limited, a U.K. company ("Vector"), which owns
a 9% interest in VEESEA Holdings (the "Veesea Joint Venture"). The Company's
joint venture arrangement with Vector enabled it to enter a niche market using
local management and an existing infrastructure. The number of standby safety
vessels owned by the Company has grown from one vessel in December 1991 to ten
vessels in service today.
SEAVEC POOL. In January 1995, the Company entered into a pooling
arrangement with Toisa Ltd., a U.K. offshore marine transportation and services
company ("Toisa"). Under this pooling arrangement (the "SEAVEC Pool"), the
Company and Toisa jointly market their standby safety vessels in the North Sea
market, with operating revenues pooled and allocated to the respective companies
pursuant to a formula based on the class of vessels each company contributes to
the pool. The SEAVEC Pool currently markets 15 vessels.
SAINT FLEET POOL. In November 1996, Vector entered into bareboat charters
for seven standby safety vessels which provide for VEESEA Holdings, Toisa, and
the owners of the vessels to share in net operating profits after certain
adjustments for maintenance and management expenses (the "Saint Fleet Pool").
Vector assumed management control of these vessels in December 1996 and markets
the vessels in coordination with the SEAVEC Pool.
TMM JOINT VENTURE. During 1994, the Company and TMM organized a joint
venture to serve the Mexican offshore market (the "TMM Joint Venture"). The TMM
Joint Venture is comprised of two
33
<PAGE>
corporations, Maritima Mexicana, S.A. and SEAMEX International, Ltd., in each of
which the Company owns a 40% equity interest. The TMM Joint Venture has enabled
the Company to expand into a new market contiguous to the U.S. Gulf of Mexico
and has provided greater marketing flexibility for the Company's fleet in the
region.
SMIT JOINT VENTURES. Pursuant to the Smit Transaction, the Company acquired
certain joint venture interests owned by Smit (the "Smit Joint Ventures") which
increased the Company's presence in international markets. The vessel-owning
Smit Joint Ventures in which the Company owns a 50% or less equity interest
include 21 vessels currently operated in the Far East, Latin America, the Middle
East, the Mediterranean and offshore West Africa.
CUSTOMERS
The Company offers offshore marine services to over 140 customers who are
primarily major integrated oil companies and large independent oil and gas
exploration and production companies. The Company has enjoyed long-standing
relationships with several of its customers with whom the Company has sought to
establish alliances. The percentage of revenues attributable to an individual
customer varies from time to time, depending on the level of oil and gas
exploration undertaken by a particular customer, the suitability of the
Company's vessels for the customer's projects and other factors, many of which
are beyond the Company's control. For the quarter ended June 30, 1997,
approximately 10.8% of the Company's marine operating revenues was received from
Mobil Oil Corporation.
CHARTER TERMS
Customers for offshore vessels generally award charters based on suitability
and availability of equipment, price and reputation for quality service and
duration of employment. Charter terms may vary from several days to several
years.
COMPETITION
The offshore marine services industry is highly competitive. In addition to
price, service and reputation, the principal competitive factors for offshore
supply fleets include the existence of national flag preference, operating
conditions and intended use (all of which determine the suitability of vessel
types), complexity of maintaining logistical support and the cost of
transferring equipment from one market to another.
Although there are many suppliers of marine offshore services, management
believes there is only one company, Tidewater, Inc., which operates in all
geographic markets and has a substantial percentage of the domestic and foreign
offshore marine market in relation to that of the Company and its other
competitors.
ENVIRONMENTAL SERVICES
MARKET
The Company's environmental services business is operated primarily through
NRC and provides contractual oil spill response services to those who store,
transport, produce or handle petroleum and certain other non-petroleum oils as
required by OPA 90. The market for marine spill response retainer services has
grown substantially since 1990 when the United States Congress passed OPA 90
after the Exxon Valdez spill in Alaska. OPA 90 requires that all tank vessels
operating within the Exclusive Economic Zone of the United States and all
facilities and pipelines handling oil that could have a spill impacting the
navigable waters of the United States, develop a plan to respond to a "worst
case" oil spill and ensure by contract or other approved means the ability to
respond to such a spill.
34
<PAGE>
EQUIPMENT AND SERVICES
OIL SPILL RESPONSE SERVICES. The Company owns and maintains specialized
equipment which is positioned in designated areas to comply with regulations
promulgated by the Coast Guard, and also has personnel trained to respond to oil
spills as required by customers and regulations. This specialized oil spill
response equipment includes containment boom, used to protect sensitive areas
and also to trap oil in areas where it can be recovered, pumps, vacuum transfer
units, skimmers, portable barges, mobile command centers equipped with field
communications capability, small boats for deploying boom and barges and utility
vessels outfitted with skimming equipment to recover oil.
When an oil spill occurs, the Company mobilizes this equipment, using either
its own personnel or personnel under contract, to provide emergency response
services for both land and marine oil spills. This equipment is also used by the
Company to offer industrial maintenance services. The Company currently has
agreements with approximately 53 independent oil spill response contractors
through a network organized by the Company. The network is assisted by NRC's
regional offices in Texas, Florida, Tennessee and Puerto Rico, and by NRC's
access to the Company's operating bases and offshore marine vessels in the U.S.
Gulf of Mexico. NRC maintains constant contact with its network members through
client drills, training sessions, standby services and actual oil spill
responses. The drills are mandated by OPA 90 and ensure a constant state of
response readiness. NRC has acted as the principal contractor on several of the
largest oil spills that have occurred in the United States after the enactment
of OPA 90.
NRC has expanded its coverage area to include the West Coast of the United
States through Clean Pacific Alliance ("CPA"), a joint venture between NRC and
Crowley Marine Services. CPA has established dedicated oil spill response
capabilities including two response vessels, response depots, a contractually
available Marine Response Network and a client service center.
The table below sets forth certain summary information regarding the
Company's oil spill response resources at December 31, 1996 and June 30, 1997.
<TABLE>
<CAPTION>
AT AT
DECEMBER 31, JUNE 30,
1996 1997
------------------ ------------------
<S> <C> <C>
Certified Oil Spill Response Vessels(1).................................. 15 15
Support Vessels.......................................................... 187 210(2)
Shallow Water Recovery Barges............................................ 58 58
Mobile Trailers.......................................................... 141 144
Vacuum Transfer Units.................................................... 38 38
Mobile Communications Centers............................................ 3 3
Containment Boom......................................................... 152,000 ft. 152,000 ft.
Skimming Capacity........................................................ 804,939 bbls/day 804,839 bbls/day
Temporary Storage........................................................ 183,563 bbls 184,063 bbls
</TABLE>
- ------------------------
(1) Includes 11 vessels owned by the Company's environmental subsidiaries, two
vessels owned by the Company's marine subsidiaries (also included in the
marine fleet statistics) and two vessels which are bareboat chartered-in.
The table does not include resources owned by the Company's network of
independent response contractors.
(2) Includes 12 twenty-eight foot boom handling vessels and 196 vessels operated
in the U.S. Gulf of Mexico by the Company's marine subsidiaries, of which
four have been outfitted with oil spill response equipment.
TRAINING AND DRILL SERVICES. The Company has developed customized training
programs for industrial companies which educate personnel on the risks
associated with and the prevention of and response to marine and non-marine oil
spills. The Company also plans for and participates in customer oil spill
response drill programs. The Company's drill services and training programs are
offered both on a stand-alone basis and as part of its base retainer services.
35
<PAGE>
INTERNATIONAL. The Company has also established International Response
Corporation ("IRC"), a wholly-owned subsidiary, to evaluate international
opportunities with respect to its environmental services business. IRC is
currently providing consulting services in connection with oil spill response,
pollution control, and the evaluation of the feasibility of constructing waste
oil, waste water and sludge reception facilities in Asia.
CUSTOMERS AND CONTRACT ARRANGEMENTS
The Company offers its services and oil spill response services primarily to
the domestic and international shipping community, including dry cargo vessel
owners and owners of facilities such as refineries, pipelines, exploration and
production platforms and tank terminals. In addition to its retainer customers,
the Company also provides oil spill response services to others, including,
under certain circumstances, the Coast Guard. The Company presently has
approximately 340 customers and provides retainer coverage to approximately
1,750 self-propelled vessels, 750 barges and 450 facilities. The Company's
retainer arrangements with these customers include both short-term contracts
(one year or less) and long-term agreements, in some cases as long as seven
years from inception. At June 30, 1997, Coastal Refining and Marketing, Inc.
("Coastal") and CITGO, NRC's two largest customers, accounted for approximately
28% and 9%, respectively, of NRC's retainer revenues.
The Company also generates revenue from the supervision of activities in
response to oil spill emergencies. The Company's environmental services revenue
can be dramatically impacted by the level of spill activity. A single large
spill can contribute significantly to overall revenues and to operating income.
However, the Company is unable to predict revenues from oil spills.
COMPETITION
The principal competitive factors in the environmental response business are
price, service, reputation, experience and operating capabilities. Management
believes that the lack of uniformity of regulatory development and enforcement
on a federal and state level has created a lower barrier to entry in several
market segments which has increased the number of competitors. NRC faces
competition primarily from the Marine Spill Response Corporation, a non-profit
corporation funded by the major integrated oil companies, other industry
cooperatives and also from smaller contractors who target specific market
niches.
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1996 TRANSACTIONS
During the year ended December 31, 1996, the Company entered into the
transactions described below.
MCCALL ACQUISITION. On May 31, 1996, the Company acquired McCall
Enterprises, Inc. and its affiliated companies (collectively, the "McCall
Companies") which, at the date of such 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 common stock to the former stockholders of the McCall Companies. The
McCall Acquisition has been accounted for as a pooling-of-interests.
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
(as defined) and to prepay $9.6 million of indebtedness then owed by the Company
to CNN.
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 $22.7 million in cash
(the "1996 CNN Transaction"). 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 $4.8 million principal amount of the Company's 2.5% Convertible
Subordinated Notes due January 1, 2004 (the "2.5% Notes") into 156,650 shares of
Common Stock (in accordance with the terms of the 2.5% Notes), and subsequently
sold all 616,598 shares of Common Stock then owned by it (including the shares
of Common Stock received by CNN upon such conversion) in the 1996 Common Stock
Offering.
6.0% NOTE CONVERSION. On July 12, 1996, following notice from the Company
of the redemption on such date of all $55.3 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 Common Stock issued by the Company (the "6.0% Note
Conversion").
CONVERTIBLE NOTES PLACEMENT. On November 5, 1996, the Company completed a
private placement of $172.5 million aggregate principal amount of 5 3/8%
Convertible Subordinated Notes due November 15, 2006 (the "Convertible Notes")
of the Company (the "Convertible Notes Placement").
SMIT TRANSACTION. On December 19, 1996, the Company acquired substantially
all of the offshore vessel assets and certain joint venture interests owned by
Smit and its subsidiaries (the "Smit Transaction"). These acquired assets
include 100% interests in 24 vessels and 50% interests in nine vessels sold
directly by Smit and Smit's interests in joint ventures that own and operate 12
vessels. The aggregate consideration, including amounts payable under certain
lease purchase arrangements for two vessels, consisted of: (i) approximately
$71.1 million in cash, (ii) 712,000 shares of the Company's Common Stock, (iii)
up to $22.0 million principal amount of the Company's Series A 5 3/8%
Convertible Subordinated Notes due November 15, 2006 (of which $15.3 million
principal amount has been issued to date) and (iv) additional consideration as
described herein. The Company also entered into several related agreements.
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DESCRIPTION OF EXCHANGE NOTES
SUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The terms of the Exchange Notes and the Existing Notes are identical in all
material respects, except for certain transfer restrictions relating to the
Existing Notes. The Exchange Notes will bear interest from the most recent date
to which interest has been paid on the Existing Notes or, if no interest has
been paid on the Existing Notes, from September 22, 1997. Accordingly,
registered holders of Exchange Notes on the relevant record date for the first
interest payment date following the consummation of the Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid on the Existing Notes or, if no interest has been paid, from September 22,
1997. Existing Notes accepted for exchange will cease to accrue interest from
and after the date of consummation of the Exchange Offer. Holders whose Existing
Notes are accepted for exchange will not receive any payment in respect of
interest on such Existing Notes otherwise payable on any interest payment date
the record date for which occurs on or after consummation of the Exchange Offer.
TERMS OF THE EXCHANGE NOTES
The Exchange Notes will be unsecured senior obligations of the Company,
limited to $150.0 million aggregate principal amount, and will mature on
September 15, 2009. The Exchange Notes will bear interest at the rate per annum
shown on the cover page hereof from September 22, 1997 or from the most recent
date to which interest has been paid or provided for, payable semiannually to
Holders of record at the close of business on the March 1 or September 1
immediately preceding the interest payment date on March 15 and September 15 of
each year, commencing March 15, 1998. The Company will pay interest on overdue
principal at 1% per annum in excess of such rate, and it will pay interest on
overdue installments of interest at such higher rate to the extent lawful.
Interest will be paid on a 360-day year, twelve 30-day month basis.
The interest rate on the Existing Notes is subject to increase in certain
circumstances if the Company does not file a registration statement relating to
the Exchange Offer or if the registration statement is not declared effective on
a timely basis or if certain other conditions are not satisfied, all as further
described under "The Exchange Offer."
OPTIONAL REDEMPTION
The Exchange Notes will be redeemable at any time, at the option of the
Company, in whole or from time to time in part, upon not less than 30 and not
more than 60 days' notice as provided in the Indenture, on any date prior to
maturity (the "Redemption Date") at a price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on an interest payment date that is on or prior to the Redemption Date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the Notes
plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Exchange Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the Redemption Date,
of:
(a) each interest payment that, but for such redemption, would have
been payable on the Exchange Note (or portion thereof) being redeemed on
each interest payment date occurring after the Redemption Date (excluding
any accrued interest for the period prior to the Redemption Date); and
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(b) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Exchange Note (or portion
thereof) being redeemed; over
(2) the principal amount of the Exchange Note (or portion thereof) being
redeemed.
The present values of interest and principal payments referred to in clause
(1) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below) plus 20 basis
points.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided that
if the Company fails to make such appointment at least 45 business days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make such calculation, such calculation will be made by Salomon Brothers Inc
or, if such firm is unwilling or unable to make such calculation, by an
independent investment banking institution of national standing appointed by the
Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means a
rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Notes, calculated to the nearest 1/12th of
a year (the "Remaining Term"). The Treasury Yield will be determined as of the
third business day immediately preceding the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be determined
by reference to the most recent statistical release published by the Federal
Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or
any successor release (the "H.15 Statistical Release"). If the H.15 Statistical
Release sets forth a weekly average yield for United States Treasury Notes
having a constant maturity that is the same as the Remaining Term, then the
Treasury Yield will be equal to such weekly average yield. In all other cases,
the Treasury Yield will be calculated by interpolation, on a straight-line
basis, between the weekly average yields on the United States Treasury Notes
that have a constant maturity closest to and greater than the Remaining Term and
the United States Treasury Notes that have a constant maturity closest to and
less than the Remaining Term (in each case as set forth in the H.15 Statistical
Release). Any weekly average yields so calculated by interpolation will be
rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above
being rounded upward. If weekly average yields for United States Treasury Notes
are not available in the H.15 Statistical Release or otherwise, then the
Treasury Yield will be calculated by interpolation of comparable rates selected
by the Independent Investment Banker.
In the case of any partial redemption, selection of the Notes for redemption
will be made by the Trustee on a pro rata basis, by lot or by such other method
as the Trustee in its sole discretion shall deem to be fair and appropriate,
although no Note of $1,000 in original principal amount or less shall be
redeemed in part. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
RANKING
The indebtedness evidenced by the Existing Notes is and the indebtedness
evidenced by the Exchange Notes will be senior unsecured obligations of the
Company, will rank PARI PASSU in right of payment with all existing and future
senior indebtedness of the Company and will be senior in right of payments to
all future subordinated indebtedness of the Company. The Company, as of
September 30, 1997, had outstanding $30.7 million of senior indebtedness,
approximately $6.8 million of which was principal amount of
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borrowings under a $100.0 million revolving bank credit facility with Den norske
Bank ASA, as Agent for itself and other lenders named therein, and $150.0
million of Existing Notes with which the Exchange Notes would rank PARI PASSU.
Substantially all of the Company's operating income and cash flow is
generated by its subsidiaries. As a result, funds necessary to meet the
Company's debt service obligations are provided in part by distributions or
advances from its subsidiaries. Under certain circumstances, contractual and
legal restrictions, as well as the financial condition and operating
requirements of the Company's subsidiaries, could limit the Company's ability to
obtain cash from its subsidiaries for the purpose of meeting its debt service
obligations, including the payment of principal and interest on the Notes. The
claims of creditors of the subsidiaries will effectively have priority with
respect to the assets and earnings of such companies over the claims of
creditors of the Company, including the holders of the Notes.
BOOK-ENTRY; DELIVERY AND FORM
Except as described below, the Notes sold will initially be issued in the
form of one or more global notes (the "Global Notes"). The Global Notes will be
deposited with, or on behalf of, the Depository and registered in the name of
the Depository or its nominee. Except as set forth below, the Global Notes may
be transferred, in whole and not in part, only to the Depository or another
nominee of the Depository. Investors may hold their beneficial interests in the
Global Notes directly through the Depository if they have an account with the
Depository or indirectly through organizations which have accounts with the
Depository.
Upon the transfer of a Note in definitive form, such Note will, unless the
Global Notes have previously been exchanged for Notes in definitive form, be
exchanged for an interest in the Global Notes representing the principal amount
of Notes being transferred, with certain exceptions for transfers pursuant to
Rule 144.
Notes originally purchased by persons outside the United States pursuant to
sales in accordance with Regulation S under the Securities Act will be
represented upon issuance by a temporary global Note certificate in fully
registered form without interest coupons (the "Temporary Certificate") which
will not be exchangeable for Certificated Notes until the expiration of the
"40-day restricted period" within the meaning of Rule 903(c)(3) of Regulation S
under the Securities Act. The Temporary Note will be registered in the name of,
and held by, a temporary certificate holder until the expiration of such 40-day
period, at which time the Temporary Certificate will be delivered to the Trustee
in exchange for Certificated Notes registered in the names requested by such
temporary certificate holder. In addition, until the expiration of such 40-day
period, transfers of interests in the Temporary Certificate can only be effected
through such temporary certificate holder in accordance with the requirements
set forth in "Notice to Investors."
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of institutions that have accounts
with the Depository ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (which may
include the Initial Purchasers), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depository's book-entry system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly (collectively, the "indirect participants").
Holders who are not
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participants may beneficially own securities held by or on behalf of DTC only
through participants or indirect participants.
Upon the issuance of the Global Notes, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Notes to the accounts of participants. The accounts
to be credited shall be designated by the Initial Purchasers of such Notes.
Ownership of beneficial interests in the Global Notes will be limited to
participants or persons that may hold interests through participants. Any person
acquiring an interest in a Global Note through an offshore transaction in
reliance on Regulation S may hold such interest through CEDEL or Euroclear.
Ownership of beneficial interests in the Global Notes will be shown on, and the
transfer of those ownership interests will be effected only through, records
maintained by the Depository (with respect to participants' interest) and such
participants (with respect to the owners of beneficial interests in the Global
Notes other than participants). The laws of some jurisdictions may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the Global Notes.
So long as the Depository, or its nominee, is the registered holder and
owner of the Global Notes, the Depository or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in the Global Notes will not be entitled to have the Notes
represented by the Global Notes registered in their names, will not receive or
be entitled to receive physical delivery of certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
the Global Notes. The Company understands that under existing industry practice,
in the event an owner of a beneficial interest in the Global Notes desires to
take any action that the Depository, as the holder of the Global Notes, is
entitled to take, the Depository would authorize the participants to take such
action, and that the participants would authorize beneficial owners owning
through such participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal of and interest on Notes represented by the Global
Notes registered in the name of and held by the Depository or its nominee will
be made to the Depository or its nominee, as the case may be, as the registered
owner and holder of the Global Notes.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Notes as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in the Global
Notes held through such participants will be governed by standing instructions
and customary practices and will be the responsibility of such participants. The
Company will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Notes for any Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in the Global Notes owning through such participants.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Notes may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
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CERTIFICATED NOTES
The Notes represented by the Global Notes are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of U.S.
$1,000 and integral multiples thereof if (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for the Global Notes or
if at any time the Depository ceases to be a clearing agency registered under
the Exchange Act and a successor Depository is not appointed by the Company
within 90 days, (ii) the Company in its discretion at any time determines not to
have all of the Notes represented by the Global Notes, (iii) an Event (as
defined) of Default has occurred and is continuing or (iv) upon the occurrence
of certain other events. Any Note that is exchangeable pursuant to the preceding
sentence is exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depository shall direct.
Subject to the foregoing, the Global Notes are not exchangeable, except for a
Global Note of the same aggregate denomination to be registered in the name of
the Depository or its nominee.
SAME-DAY PAYMENT
The Indenture requires that payments in respect of Notes (including
principal, premium and interest) be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof or, if no such
account is specified, by mailing a check to each such Holder's registered
address.
CERTAIN COVENANTS
The Indenture does not limit the amount of indebtedness or other obligations
that may be incurred by the Company and its subsidiaries and does not contain
provisions which would give holders of the Notes the right to require the
Company to repurchase their Notes in the event of a decline in the credit rating
of the Company's debt securities. The Indenture contains covenants including,
among others, the following:
LIMITATION ON LIENS. The Indenture provides that the Company will not, and
will not permit any of its Subsidiaries to, create, incur or otherwise cause or
suffer to exist or become effective any Liens of any kind upon any Principal
Property or any shares of stock or indebtedness of any Subsidiary that owns or
leases any Principal Property (whether such Principal Property, shares of stock
or indebtedness are now owned or hereafter acquired) unless all payments due
under the Indenture and the Notes are secured on an equal and ratable basis with
the obligations so secured until such time as such obligation is no longer
secured by a Lien, except for Permitted Liens. See also "Exempted Indebtedness"
below.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Indenture provides that
neither the Company nor any Subsidiary will enter into any Sale and Leaseback
Transaction with respect to any Principal Property unless either (a) the Company
or such Subsidiary would be entitled, pursuant to the provisions of the
Indenture, to incur Indebtedness secured by a Lien on the property to be leased
without equally and ratably securing the Notes or (b) the Company, within 180
days after the effective date of such transaction, applies to the voluntary
retirement of its funded debt an amount equal to the value of such transaction,
defined as the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value, in the opinion of the Board of Directors, of
the leased property at the time such transaction was entered into. See also
"Exempted Indebtedness" below.
EXEMPTED INDEBTEDNESS. Notwithstanding the foregoing limitations on Liens
and Sale and Leaseback Transactions, the Company and its Subsidiaries may issue,
assume, or guarantee Indebtedness secured by a Lien without securing the Notes,
or may enter into Sale and Leaseback Transactions without retiring funded debt,
or enter into a combination of such transactions, if the sum of the principal
amount of all such Indebtedness and the aggregate value of all such Sale and
Leaseback Transactions does not at any time exceed 15% of the Consolidated Net
Tangible Assets of the Company and its consolidated Subsidiaries as shown in the
audited consolidated balance sheet contained in the latest annual report to the
shareholders of the Company.
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MERGER AND CONSOLIDATION. The Indenture provides that the Company, without
the consent of the Holders of any of the outstanding Notes, may consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person or may permit any Person to
consolidate with or merge into, or transfer or lease its properties
substantially as an entirety to, the Company; provided that (a) the successor,
transferee or lessee is organized under the laws of any United States
jurisdiction; (b) the successor, transferee or lessee, if other than the
Company, expressly assumes the Company's obligations under the Indenture and the
Notes by means of a supplemental indenture entered into with the Trustee; (c)
after giving effect to the transaction, no Default shall have occurred and be
continuing; and (d) certain other conditions are met.
Under any consolidation by the Company with, or merger by the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety as described in the preceding
paragraph, the successor resulting from such consolidation or into which the
Company is merged or the transferee or lessee to which such conveyance, transfer
or lease is made, will succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture, and thereafter,
except in the case of a lease, the predecessor (if still in existence) will be
released from its obligations and covenants under the Indenture and the Notes.
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture to be a (i) default in the
payment of any interest upon any of the Notes for 30 days or more after such
payment is due, (ii) default in the payment of the principal of and premium, if
any, on any of the Notes when due, (iii) default by the Company in the
performance, or breach, of any of its other covenants in the Indenture which
will not have been remedied by the end of a period of 60 days after written
notice 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 Notes, (iv)
failure to pay when due the principal of, or acceleration of, any indebtedness
for money borrowed by the Company or a Subsidiary in excess of $15.0 million
principal amount, if such indebtedness is not discharged, or such acceleration
is not annulled, by the end of a period of 10 days after written notice 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 Notes and (v) certain events of
bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary.
The Indenture provides that if an Event of Default (other than of a type
referred to in clause (v) of the preceding paragraph) shall have occurred and is
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the outstanding Notes may declare the principal amount of all Notes to
be immediately due and payable. Such declaration may be rescinded if certain
conditions are satisfied. If an Event of Default of the type referred to in
clause (v) of the preceding paragraph shall have occurred, the principal amount
of the outstanding Notes shall automatically become immediately due and payable.
The Indenture also provides that the Holders of not less than a majority in
principal amount of the outstanding Notes may direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided that such
direction is not in conflict with any rule of law or with the Indenture. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
The Indenture contains provisions entitling the Trustee, subject to the duty
of the Trustee during the continuance of an Event of Default to act with the
required standard of care, to be indemnified by the Holders of Notes before
proceeding to exercise any right or power under the Indenture at the request of
the Holders of Notes.
No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to
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institute such proceeding as Trustee, and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the outstanding
Notes a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, such limitations do not apply
to a suit instituted by a Holder of a Note for enforcement of payment of the
principal of and premium, if any, or interest on such Note on or after the
respective due dates expressed in such Note or of the right to convert such Note
in accordance with the Indenture.
The Indenture requires the Company to file annually with the Trustee a
certificate, executed by a designated officer of the Company, stating to the
best of his knowledge that the Company is not in default under certain covenants
under the Indenture or if he has knowledge that the Company is in such default,
specifying such default.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the consent
of the Holders of a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Notes) and any past default or compliance with any provisions may also be
waived with the consent of the Holders of a majority in principal amount of the
Notes then outstanding. However, without the consent of each Holder of an
outstanding Note affected thereby, no amendment may, among other things, (i)
reduce the amount of Notes whose Holders must consent to an amendment, (ii)
reduce the rate of or extend the time for payment of interest on any Note, (iii)
reduce the principal of or extend the Stated Maturity of any Note, (iv) reduce
the amount payable upon the redemption of any Note or change the time at which
any Note may be redeemed as described under
" -- Optional Redemption" above, (v) make any Note payable in money other than
that stated in the Note, (vi) impair the right of any Holder of the Notes to
receive payment of principal of and interest on such Holder's Notes on or after
the due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Notes or (vii) make any change in the
amendment provisions which require each Holder's consent or in the waiver
provisions.
Without the consent of any Holder of the Notes, the Company and Trustee may
amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to
provide for the assumption by a successor corporation of the obligations of the
Company under the Indenture, to provide for uncertificated Notes in addition to
or in place of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code), to add guarantees with respect to the Notes, to secure the Notes,
to add to the covenants of the Company for the benefit of the Holders of the
Notes or to surrender any right or power conferred upon the Company, to make any
change that does not adversely affect the rights of any Holder of the Notes or
to comply with any requirement of the SEC in connection with the qualification
of the Indenture under the Trust Indenture Act.
The consent of the Holders of the Notes is not necessary under the Indenture
to approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders of the Notes a notice briefly describing such
amendment. However, the failure to give such notice to all Holders of the Notes,
or any defect therein, will not impair or affect the validity of the amendment.
TRANSFER
The Notes will be issued in registered form and will be transferable only
upon the surrender of the Notes being transferred for registration of transfer.
The Company may require payment of a sum sufficient to cover any tax, assessment
or other governmental charge payable in connection with certain transfers and
exchanges.
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DEFEASANCE
The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate its obligations under the covenants
described under "--Certain Covenants" (other than the covenant described under
"--Certain Covenants--Merger and Consolidation"), the operation of the cross
acceleration provision and the bankruptcy provisions with respect to Significant
Subsidiaries described under "--Events of Default" above and the limitations
contained in clauses (c) and (d) under "--Certain Covenants--Merger and
Consolidation" above ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iii), (iv) or (v) under "--Events of
Default" above or because of the failure of the Company to comply with clause
(c) or (d) under "--Certain Covenants--Merger and Consolidation" above.
In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of Counsel to the
effect that Holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and will
be subject to federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if such deposit and defeasance had
not occurred (and, in the case of legal defeasance only, such Opinion of Counsel
must be based on a ruling of the Internal Revenue Service or other change in
applicable federal income tax law).
CONCERNING THE TRUSTEE
First Trust National Association is the Trustee under the Indenture and has
been appointed by the Company as Registrar and Paying Agent with regard to the
Notes.
The Holders of a majority in principal amount of the outstanding Notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that if an Event of Default occurs (and is
not cured), the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
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"business day" means each day which is not a legal holiday.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with such principles; and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any Preferred Stock,
but excluding any debt securities convertible into such equity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting (1) all
current liabilities (excluding the amount of those which are by their terms
extendable or renewable at the option of the obligor to a date more than 12
months after the date as of which the amount is being determined) and (2) all
goodwill, tradenames, trademarks, patents, unamortized debt discount and expense
and other like intangible assets, all as set forth on the most recent balance
sheet of the Company and its consolidated Subsidiaries and determined in
accordance with GAAP.
"Consolidated Net Worth" means the excess of assets over liabilities of the
Company and its consolidated Subsidiaries, plus Minority Interests, as
determined from time to time in accordance with GAAP.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication, (i) any liability, contingent or otherwise, of
such Person (A) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property), but excluding trade accounts payable arising in the
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ordinary course of business; (iii) all obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction other than entered into in the ordinary course of business; (iv) all
indebtedness of others secured by (or for which the holder of such indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
any asset or property (including, without limitation, leasehold interests and
any other tangible or intangible property) of such Person, whether or not such
indebtedness is assumed by such Person or is not otherwise such Person's legal
liability; PROVIDED, that if the obligations so secured have not been assumed in
full by such Person or are otherwise not such Person's legal liability in full,
the amount of such indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such indebtedness secured by such Lien or
the fair market value of the assets of the property securing such Lien; (v) all
indebtedness of others (including all interest and dividends on any Indebtedness
or Preferred Stock of any other Person for the payment of which is) guaranteed,
directly or indirectly, by such Person or that is otherwise its legal liability
or which such Person has agreed to purchase or repurchase or in respect of which
such Person has agreed contingently to supply or advance funds; and (vi)
obligations in respect of Currency Agreements and Interest Rate Agreements (as
such capitalized terms are defined in the Indenture).
"Interest Rate Agreement" means in respect of a Person any interest rate
swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Issue Date" means the date on which the Notes are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
charge or adverse claim affecting title or resulting in an encumbrance against
real or personal property or a security interest of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof or any filing or agreement to file a financing statement as
debtor under the Uniform Commercial Code or any similar statute other than to
reflect ownership by a third party or property leased to the Company or any of
its Subsidiaries under a lease that is not in the nature of a conditional sale
or title retention agreement).
"Minority Interest" means any shares of stock of any class of a Subsidiary
that are not owned by the Company or a Subsidiary.
"Permitted Liens" means, with respect to any Person: (i) Liens existing on
the Issue Date; (ii) Liens on property or assets of, or any shares of stock of
or secured debt of, any corporation existing at the time such corporation
becomes a Subsidiary of the Company or at the time such corporation is merged
into the Company or any of its Subsidiaries; (iii) Liens in favor of the Company
or any of its Subsidiaries; (iv) Liens in favor of governmental bodies to secure
progress or advance payments; (v) Liens securing industrial revenue or pollution
control bonds; (vi) Liens on Property to secure Indebtedness incurred for the
purpose of (a) financing all or any part of the purchase price of such Property
incurred prior to, at the time of, or within 180 days after, the acquisition of
such Property or (b) financing all or any part of the cost of construction,
improvement, development or expansion of any such Property; (vii) statutory
liens or landlords', carriers', warehouseman's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made therefor; (viii) Liens on current assets of Subsidiaries securing
Indebtedness of such Subsidiaries; and (ix) any extensions, substitutions,
replacements or renewals in whole or in part of a Lien (an "existing Lien")
enumerated in clauses (i) through (viii) above; PROVIDED that the Lien may not
extend beyond (A) the Property or Indebtedness subject to the existing Lien and
(B) improvements and construction on such Property and the Indebtedness secured
by the Lien may not exceed the Indebtedness secured at the time by the existing
Lien.
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"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Principal Property" means any Property owned or leased by the Company or
any Subsidiary, the gross book value of which exceeds one percent of
Consolidated Net Worth.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (1) temporary leases for a term, including renewals
at the option of the lessee, of not more than five years, (2) leases between the
Company and a Subsidiary or between Subsidiaries, (3) leases of Principal
Property executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (4) arrangements pursuant
to any provision of law with an effect similar to the former Section 168(f)(8)
of the Internal Revenue Code of 1954.
"SEC" means the Securities and Exchange Commission.
"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"Stated Maturity," when used with respect to any security or any installment
of interest thereon, means the date specified in such security as the fixed date
on which the principal of such security or such installment of interest is due
and payable.
"Subsidiary" of any Person means (i) any Person of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Subsidiaries of that Person or a
combination thereof, and (ii) any partnership, joint venture or other Person in
which such Person or one or more of the Subsidiaries of that Person or a
combination thereof has the power to control by contract or otherwise the board
of directors or equivalent governing body or otherwise controls such entity.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly-Owned Subsidiary" means a Subsidiary all the Capital Stock of which
(other than directors' qualifying shares) is owned by the Company or one or more
Wholly-Owned Subsidiaries.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Existing Notes were originally sold by the Company on September 22,
1997, to the Initial Purchasers pursuant to the Purchase Agreement. The Initial
Purchasers subsequently resold the Existing Notes to qualified institutional
buyers pursuant to Rule 144A under the Securities Act, or outside the United
States in compliance with Regulation S under the Securities Act. Pursuant to the
Purchase Agreement the Company entered into a registration rights agreement with
the Initial Purchasers (the "Registration Agreement") pursuant to which the
Company agreed, for the benefit of the holders of the Existing Notes, at the
Company's cost, to (i) file a registration statement (the "Exchange Offer
Registration Statement") within 150 days after the date of original issuance of
such Existing Notes (the "Issue Date") with the Commission with respect to
registered offers to exchange each of such Existing Notes for debentures (the
"Exchange Notes") with terms identical in all material respects thereto (except
that the Exchange Notes will not contain terms with respect to transfer
restrictions or the special interest payments described below), and (ii) use its
best efforts to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act within 180 days after the Issue Date.
Promptly after the Exchange Offer Registration Statement is declared effective,
the Company will offer the Exchange Notes in exchange for surrender of the
Existing Notes (the "Exchange Offer"). The Company will keep the Exchange Offer
open for not less than 30 days (or longer if required by applicable law) after
the date notice of the Exchange Offer is mailed to the holders of the Existing
Notes.
For each Existing Note properly tendered and accepted pursuant to the
Exchange Offer and not withdrawn by the holder thereof, the holder of such
Existing Note will receive an Exchange Note having a principal amount equal to
that of the Existing Note tendered. Interest on each Exchange Note will accrue
from the last respective interest date on which interest was paid on the
Existing Note tendered in exchange therefor or, if no interest has been paid on
such Existing Note, from the Issue Date.
Based on existing interpretations of the Securities Act by the staff of the
Commission set forth in several no-action letters to third parties with respect
to similar transactions, including "Exxon Capital Holdings Corporation"
(available May 13, 1988) and "Morgan Stanley & Co. Incorporated" (available June
5, 1991) and similar no-action letters, and subject to the immediately following
sentence, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
the holders thereof (other than holders who are broker-dealers) without further
compliance with the registration and prospectus delivery provisions of the
Securities Act. As the Company has not sought a no-action letter with respect to
the Exchange Offer, there can be no assurance that the Staff of the Commission
would make a similar determination with respect to the Exchange Offer. However,
any holder of Existing Notes who is an "affiliate" of the Company or who intends
to participate in the Exchange Offer for the purpose of distributing the
Exchange Notes, or any Initial Purchasers (i) will not be able to rely on the
interpretation by the staff of the Commission set forth in the above-mentioned
no-action letters, (ii) will not be able to tender its Existing Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Exchange Notes unless such sale or transfer is made pursuant to
an exemption from such requirements.
Each holder of the Existing Notes (other than certain specified holders) who
wishes to exchange Existing Notes for Exchange Notes in the Exchange Offer will
be required to represent in the Letter of Transmittal that among other things
(i) it is not an affiliate of the Company, (ii) any Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii) at
the time of commencement of the Exchange Offer, it has no arrangement with any
person to participate in the distribution (within the meaning of the Securities
Act) of the Exchange Notes. In addition, in connection with any resales of
Exchange Notes, any broker-dealer (an "Exchanging Dealer") who acquired the
Existing Notes for its own account as a result of market-making activities or
other trading activities must deliver a prospectus meeting
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the requirements of the Securities Act. The Commission has taken the position
that Exchanging Dealers may fulfill their prospectus delivery requirements with
respect to the Exchange Notes (other than a resale of an unsold allotment from
the original sale of the Notes) with the prospectus contained in the Exchange
Offer Registration Statement. Under the Registration Agreement, the Company is
required to allow Exchanging Dealers and other persons, if any, subject to
similar prospectus delivery requirements to use the prospectus contained in the
Exchange Offer Registration Statement in connection with the resale of such
Exchange Notes for a period of 180 days (exclusive of any period during which a
stoporder shall be in effect suspending the effectiveness of the Registration
Statement) after the consummation of the Exchange Offer.
In the event that any changes in law or applicable interpretations of the
staff of the Commission do not permit the Company to effect the Exchange Offer
with respect to the Notes, or if for any reason the Exchange Offer Registration
Statement is not declared effective within 180 days following the Issue Date, or
upon the request of the Initial Purchasers under certain circumstances, the
Company will, in lieu of effecting the registration of the applicable Exchange
Notes pursuant to the Exchange Offer Registration Statement and at its cost, (i)
as promptly as practicable, file with the Commission a Shelf Registration
Statement (the "Shelf Registration Statement") covering resales of the Existing
Notes, (ii) use its best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act by the 210th day after the Issue
Date (or promptly in the event of a request by the Initial Purchasers) and (iii)
keep effective the Shelf Registration Statement until the earliest of (x) the
second anniversary of the Issue Date (or the first anniversary of the effective
date if such Shelf Registration Statement is filed at the request of the Initial
Purchasers), (y) the time when the Existing Notes registered thereunder can be
sold by non-affiliates pursuant to Rule 144 under the Securities Act without
limitation under clauses (c), (e), (f) and (h) of Rule 144, or (z) such time as
all the Existing Notes registered thereunder have been sold. See "--Resale of
the Exchange Notes." During any consecutive 365-day period, the Company will
have the ability to suspend the availability of the Shelf Registration Statement
for up to two periods of up to 45 consecutive days, but no more than an
aggregate of 60 days during any 365-day period. The Company will, in the event
of the filing of a Shelf Registration Statement, provide to each holder of such
Existing Notes copies of the prospectus which is part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement for
such Existing Notes has become effective and take certain other actions as are
required to permit unrestricted resales of such Existing Notes. A holder of such
Notes that sells such Existing Notes pursuant to the Shelf Registration
Statement generally will be required to be named as a selling security holder in
the related prospectus and to deliver a prospectus to the purchaser, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Agreement which are applicable to such a holder (including certain
indemnification obligations). In addition, each holder of such Existing Notes
will be required to deliver information to be used in connection with the Shelf
Registration Statement and to provide comments on the Shelf Registration
Statement within the time periods set forth in the Registration Agreement in
order to have their Existing Notes included in the Shelf Registration Statement
and to benefit from the provisions regarding Special Interest set forth in the
following paragraph. If the Company has consummated the Exchange Offer, then,
subject to certain limited exceptions, the Company will have no obligation to
file or to maintain the effectiveness of a Shelf Registration Statement with
respect to any Existing Notes that are not tendered in the Exchange Offer.
In the event that (i) by the 150th day following the Issue Date, the
Exchange Offer Registration Statement is not filed with the Commission, (ii) by
the 180th day following the Issue Date, neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offer is not permitted as
described above) the Shelf Registration Statement is filed with the Commission,
or (iii) by the 210th day following the Issue Date, the Exchange Offer is not
consummated or the Shelf Registration Statement is not declared effective with
respect thereto (each such event referred to in clauses (i) through (iii), a
"Registration Default"), interest will accrue on the applicable Existing Notes
(in addition to stated interest on such Notes) which, except as provided below,
shall be the sole and exclusive remedy for such
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Registration Default from and including the next day following each such
Registration Default. In each case such additional interest (the "Special
Interest") will be payable in cash semiannually in arrears each March 15 and
September 15, at a rate per annum equal to 0.25% of the principal amount of such
Existing Notes for each such Registration Default. The aggregate amount of
Special Interest payable pursuant to the above provisions will in no event
exceed 0.25% per annum of the principal amount of such Existing Notes which,
except as provided below, shall be the sole and exclusive remedy for such
Registration Default. Upon (a) the filing of the Exchange Offer Registration
Statement after the 150-day period described in clause (i) above, (b) the
effectiveness of the Exchange Offer Registration Statement or the filing of the
Shelf Registration Statement after the 180-day period described in clause (ii)
above or (c) the consummation of the Exchange Offer for such Notes or the
effectiveness of a Shelf Registration Statement, as the case may be, after the
210-day period described in clause (iii) above, the Special Interest payable on
such Notes as a result of the applicable Registration Default will cease to
accrue. For purposes of the preceding sentence, the curing of a Registration
Default by the means described in clause (b) above shall constitute a cure of
the Registration Defaults described in clauses (i) and (ii) above, and the
curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above. The Company will have no other liabilities for monetary
damages with respect to the above; PROVIDED, HOWEVER, that in the event the
Company breaches, fails to comply with or violates certain provisions of the
Registration Agreement, the holders of Existing Notes shall be entitled to, and
the Company shall not oppose the granting of, equitable relief, including
injunction and specific performance.
In the event that a Shelf Registration Statement is declared effective
pursuant to the paragraph preceding the immediately preceding paragraph, if the
Company fails to keep such Registration Statement continuously effective for the
period required by the Registration Agreement (except as specifically permitted
therein), then from such time as the Shelf Registration Statement is no longer
effective until the earlier of (i) the date that the Shelf Registration
Statement is again deemed effective and (ii) the date that is the earliest of
(x) the second anniversary of the Issue Date (or until the first anniversary of
the effective date if the Shelf Registration Statement is filed at the request
of the Initial Purchasers), (y) the time when the Existing Notes registered
thereunder can be sold by non-affiliates pursuant to Rule 144 under the
Securities Act without any limitation under clauses (c), (e), (f) and (h) of
Rule 144, or (z) the date as of which all such Existing Notes are sold pursuant
to the Shelf Registration Statement, Special Interest shall accrue at a rate per
annum equal to 0.25% of the principal amount of the Existing Notes which, except
as provided below, shall be the sole and exclusive remedy for such Registration
Default and shall be payable in cash semiannually in arrears each March 15 and
September 15. The Company will have no other liabilities for monetary damages
with respect to the above; PROVIDED, HOWEVER, that in the event the Company
breaches, fails to comply with or violates certain provisions of the
Registration Agreement, the holders of Existing Notes shall be entitled to, and
the Company shall not oppose the granting of, equitable relief, including
injunction and specific performance.
The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is available upon request to the Company.
Following the consummation of the Exchange Offer, holders of the Existing
Notes who were eligible to participate in the Exchange Offer but who did not
tender their Existing Notes will not have any further exchange or registration
rights and such Existing Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for such
Existing Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Existing
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Notes in exchange for each $1,000 principal amount of outstanding
Existing Notes accepted in the Exchange Offer. Holders may tender some or all of
their Existing Notes pursuant to the Exchange Offer. However, Existing Notes may
be tendered only in integral multiples of $1,000.
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The form and terms of the Exchange Notes are the same as the form and terms
of the Existing Notes except (i) the Exchange Notes bear a different CUSIP
Number from the Existing Notes and (ii) the Exchange Notes have been registered
under the Securities Act and hence will not bear legends restricting the
transfer thereof. The Exchange Notes will evidence the same debt as the Existing
Notes and will be entitled to the benefits of the Indenture.
As of the date of this Prospectus $150,000,000 aggregate principal amount of
Existing Notes are outstanding. The Company has fixed the close of business on
, 1997 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of the Existing Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of Delaware or the Indenture in
connection with the Exchange Offer. The Company intends to conduct the Exchange
Offer in accordance with the applicable requirements of the Exchange Act and the
rules and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Existing Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Notes from the Company.
If any tendered Existing Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Existing Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Existing Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions of the
Letter of Transmittal, transfer taxes with respect to the exchange of Existing
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than the transfer taxes in certain circumstances, in connection
with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders an announcement thereof, each prior to 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date.
The Company reserves the right (i) to delay accepting any Existing Notes, to
extend the Exchange Offer or to terminate the Exchange Offer if any of the
conditions set forth below under "--Conditions" shall not have been satisfied,
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders.
PROCEDURES FOR TENDERING
The tender of Existing Notes pursuant to any of the procedures set forth in
this Prospectus and in the Letter of Transmittal will constitute a binding
agreement between the Tendering Holder and the Company in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal. The tender of Existing Notes will constitute an agreement to
deliver good and marketable title to all tendered Existing Notes prior to the
Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
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EXCEPT AS PROVIDED IN "--GUARANTEED DELIVERY PROCEDURES," UNLESS THE
EXISTING NOTES BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL), THE COMPANY MAY, AT ITS OPTION, REJECT SUCH
TENDER. ISSUANCE OF EXCHANGE NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED
EXISTING NOTES AND DELIVERY OF ALL OTHER REQUIRED DOCUMENTS. NOTWITHSTANDING THE
FOREGOING, DTC PARTICIPANTS TENDERING THROUGH ATOP WILL BE DEEMED TO HAVE MADE
VALID DELIVERY WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (DEFINED
BELOW) PRIOR TO THE EXPIRATION DATE.
Accordingly, to properly tender Existing Notes, the following procedures
must be followed:
EXISTING NOTES HELD THROUGH DTC. Each Beneficial Owner holding Existing
Notes through a DTC Participant must instruct such DTC Participant to cause its
Existing Notes to be tendered in accordance with the procedures set forth in
this Prospectus.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant holding Existing Notes through DTC must (i) electronically transmit
its acceptance through ATOP, and DTC will then edit and verify the acceptance,
execute a book-entry delivery to the Exchange Agent's account at DTC and send an
Agent's Message to the Exchange Agent for its acceptance, or (ii) comply with
the guaranteed delivery procedures set forth below and in the Notice of
Guaranteed Delivery. See "--Guaranteed Delivery Procedures."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to
Existing Notes held through DTC, and any financial institution that is a DTC
Participant may make book-entry delivery of interests in Existing Notes into the
Exchange Agent's account through ATOP. However, although delivery of interests
in the Existing Notes may be effected through book-entry transfer into the
Exchange Agent's account through ATOP, an Agent's Message in connection with
such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the Exchange Agent at its address set forth
under "--Exchange Agent," or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the Expiration Date. Delivery of
documents to DTC does not constitute delivery to the Exchange Agent. The
confirmation of a book-entry transfer into the Exchange Agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
each DTC Participant tendering through ATOP that such DTC Participants have
received a Letter of Transmittal and agree to be bound by the terms of the
Letter of Transmittal and that the Company may enforce such agreement against
such DTC Participants.
Cede & Co., as the Holder of the global certificates representing the
Existing Notes (each a "Global Security," or together, the "Global Securities"),
will tender a portion of each of the Global Securities equal to the aggregate
principal amount due at the stated maturity for which instructions to tender are
given by DTC Participants.
EXISTING NOTES HELD BY HOLDERS. Each Holder must (i) complete and sign and
mail or deliver the accompanying Letter of Transmittal, and any other documents
required by the Letter of Transmittal, together with certificate(s) representing
all tendered Existing Notes, to the Exchange Agent at its address set forth
under "--Exchange Agent," or (ii) comply with the guaranteed delivery procedures
set forth below and in the Notice of Guaranteed Delivery. See "--Guaranteed
Delivery Procedures."
All signatures on a Letter of Transmittal must be guaranteed by any member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor" institution
within the meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution"); PROVIDED, HOWEVER, that signatures on a Letter of Transmittal
need not be guaranteed if such Existing Notes
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are tendered for the account of an Eligible Institution, including (as such
terms are defined in Rule 17Ad-15): (i) a bank; (ii) a broker, dealer, municipal
securities dealer, municipal securities broker, government securities dealer or
government securities broker; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a savings
institution that is a participant in a Securities Transfer Association
recognized program.
If a Letter of Transmittal or any Existing Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
Holders should indicate in the applicable box in the Letter of Transmittal
the name and address to which substitute certificates evidencing Existing Notes
for amounts not tendered are to be issued or sent, if different from the name
and address of the person signing the Letter of Transmittal. In the case of
issuance in a different name, the employer identification or social security
number of the person named must also be indicated. If no instructions are given,
such Existing Notes not tendered, as the case may be, will be returned to the
person signing the Letter of Transmittal.
By tendering, each Holder and each DTC Participant will make to the Company
the representations set forth in the fourth paragraph under the heading
"--Purpose and Effect of the Exchange Offer."
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, as the case may be, each Tendering Holder waives any
right to receive any notice of the acceptance for purchase of its Existing
Notes.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Existing Notes will be resolved by the
Company, whose determination will be final and binding. The Company reserves the
absolute right to reject any or all tenders that are not in proper form or the
acceptance of which may, in the opinion of counsel for the Company, be unlawful.
The Company also reserves the absolute right to waive any condition to the
Exchange Offer and any irregularities or conditions of tender as to particular
Existing Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding. Unless waived, any irregularities in connection with tenders
must be cured within such time as the Company shall determine. The Company and
the Exchange Agent shall not be under any duty to give notification of defects
in such tenders and shall not incur liabilities for failure to give such
notification. Tenders of Existing Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Existing Notes received
by the Exchange Agent that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holder, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND EXISTING NOTES MUST BE SENT ONLY TO THE EXCHANGE
AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR EXISTING NOTES TO THE COMPANY OR
DTC.
The method of delivery of Existing Notes and Letters of Transmittal, any
required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or Letters of
Transmittal and, except as otherwise provided in the applicable Letter of
Transmittal, delivery will be deemed made only when actually received by the
Exchange Agent. If delivery is by mail, it is suggested that the Holder use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to the Expiration Date.
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GUARANTEED DELIVERY PROCEDURES
EXISTING NOTES HELD THROUGH DTC. DTC Participants holding Existing Notes
through DTC (the "Book-Entry Transfer Facility") who wish to cause their
Existing Notes to be tendered, but who cannot transmit their acceptances through
ATOP prior to the Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided by the Company herewith; and
(c) Book-Entry Confirmation and an Agent's Message in connection
therewith (as described above) are received by the Exchange Agent within
three New York Stock Exchange trading days after the date of the execution
of the Notice of Guaranteed Delivery.
EXISTING NOTES HELD BY HOLDERS. Holders who wish to tender their Existing
Notes and (i) whose Existing Notes are not immediately available, (ii) who
cannot deliver their Existing Notes, the Letter of Transmittal or any other
required documents to the Exchange Agent or (iii) who cannot complete the
procedures for book-entry transfer, prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the holder, the
certificate number(s) of such Existing Notes and the principal amount of
Existing Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days after
the Expiration Date, the Letter of Transmittal (or facsimile thereof)
together with the certificate(s) representing the Existing Notes (or a
confirmation of book-entry transfer of such Existing Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility), and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Existing Notes in proper form for transfer (or a confirmation or book-entry
transfer of such Existing Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility), and all other documents required by the
Letter of Transmittal are received by the Exchange Agent upon three New York
Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Existing Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Existing Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
EXISTING NOTES HELD THROUGH DTC. DTC Participants holding Existing Notes
who have transmitted their acceptances through ATOP may, prior to 5:00 p.m., New
York City time, on the Expiration Date, withdraw the instruction given thereby
by delivering to the Exchange Agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC Participant, the principal amount due at the stated maturity of the Existing
Notes to which such withdrawal relates and the signature of the DTC
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Participant. Withdrawal of such an instruction will be effective upon receipt of
such written notice of withdrawal by the Exchange Agent.
EXISTING NOTES HELD BY HOLDERS. Holders may withdraw a tender of Existing
Notes in the Exchange Offer, by a telegram, telex, letter or facsimile
transmission notice of withdrawal received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date.
Any such notice of withdrawal must (i) specify the name of the person having
deposited the Existing Notes to be withdrawn (the "Depositor"), (ii) identify
the Existing Notes to be withdrawn (including the certificate number(s) and
principal amount due at the stated maturity of such Existing Notes, or, in the
case of Existing Notes transferred by book-entry transfer, the name and number
of the account at the Book-Entry Transfer Facility to be credited), (iii) be
signed by the holder in the same manner as the original signature on the Letter
of Transmittal by which such Existing Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Existing Notes register the
transfer of such Existing Notes into the name of the person withdrawing the
tender and (iv) specify the name in which any such Existing Notes are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Existing Notes so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer, and no Exchange Notes will
be issued with respect thereto unless the Existing Notes so withdrawn are
validly re-tendered. Any Existing Notes which have been tendered but which are
not accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Existing Notes may be
re-tendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
All signatures on a notice of withdrawal must be guaranteed by an Eligible
Institution; PROVIDED, HOWEVER, that signatures on the notice of withdrawal need
not be guaranteed if the Existing Notes being withdrawn are held for the account
of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC Participant or a Holder, as the case may be, in the same manner as the
person's name appears on its transmission through ATOP or Letter of Transmittal,
as the case may be, to which such withdrawal relates. If a notice of withdrawal
is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the revocation appropriate evidence of authority to execute
the notice of withdrawal. A DTC Participant or a Holder may withdraw an
instruction or a tender, as the case may be, only if such withdrawal complies
with the provisions of this Prospectus.
A withdrawal of a tender of Existing Notes by a DTC Participant or a Holder,
as the case may be, may be rescinded only by a new transmission of an acceptance
through ATOP or execution and delivery of a new Letter of Transmittal, as the
case may be, in accordance with the procedures described herein.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, and subject to its
obligations pursuant to the Registration Agreement, the Company shall not be
required to accept for exchange, or exchange securities for, any Existing Notes,
and may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Existing Notes, if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the judgment of the Company upon written advice of counsel, could
reasonably be expected to materially impair the ability of the Company to
proceed with the Exchange Offer or any material adverse development has
occurred in any existing action or proceeding with respect to the Company or
any of the subsidiaries; or
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(b) any law, statute, rule, regulation or interpretation by the staff of
the Commission is proposed, adopted or enacted, which, in the judgment of
the company and based on written advice of counsel, could reasonably be
expected to materially impair the ability of the Company to proceed with the
Exchange Offer or materially impair the contemplated benefits of the
Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval the
Company shall, in its discretion and based on written advice of counsel,
deem necessary for the consummation of the Exchange Offer as contemplated
hereby.
If any of the conditions are not satisfied, the Company may (i) refuse to
accept any Existing Notes and return all tendered Existing Notes to the
tendering holders, (ii) extend the Exchange Offer and retain all Existing Notes
tendered prior to the expiration of the Exchange Offer, subject, however, to the
rights of holders to withdraw such Existing Notes (see "--Withdrawal of
Tenders"), or (iii) waive such unsatisfied conditions with respect to the
Exchange Offer and accept all properly tendered Existing Notes which have not
been withdrawn.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in whole or in part at any time and from time to time
upon advice of outside counsel. The failure by the Company at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
In addition, the Company will not accept for exchange any Existing Notes
tendered and no Exchange Notes will be issued in exchange for any such Existing
Notes, if at such time any stop order is threatened by the Commission or in
effect with respect to the Registration Statement of which this Prospectus is a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended.
The Exchange Offer is not conditioned on any minimum principal amount of
Existing Notes being tendered for exchange.
EXCHANGE AGENT
First Trust National Association has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent, addressed as follows:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Therese Linscheid
Specialized Finance
Telephone: (612) 244-1234
Facsimile: (612) 244-1537
Delivery to an address other than as set forth above, or transmission of
instructions via a facsimile number other than the one set forth above, will not
constitute a valid delivery.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The
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Company, however, will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Existing Notes, which is face value, as reflected in the Company's accounting
records on the date of exchange. Accordingly, no gain or loss for accounting
purposes will be recognized by the Company. The expenses of the Exchange Offer
will be amortized over the term of the Exchange Notes under generally accepted
accounting principles.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Existing Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Existing
Notes may be resold only (i) to the Company, (ii) so long as such Existing Notes
are eligible for resale pursuant to Rule 144A, to a person whom the seller
reasonably believes is a "qualified institutional buyer," as defined in Rule
144A under the Securities Act (a "QIB"), that purchases for its own account or
for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iii) outside the United States
in accordance with Regulation S, (iv) to an institution that is an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
(an "Institutional Accredited Investor") who has certified to the Company and
the Trustee for the Existing Notes that such transferee is an Institutional
Accredited Investor and is acquiring such Notes for investment purposes and not
for distribution, (iv) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities Act or
(v) pursuant to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any state of the
United States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that a holder or other person who receives Exchange Notes
in the ordinary course of business, whether or not such person is the holder
(other than (i) a broker-dealer who purchases such Exchange Notes from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) who receives Exchange Notes in
exchange for Existing Notes, and who is not participating, does not intend to
participate, and has no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes, will be allowed to
resell the Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act.
However, if any holder acquires Exchange Notes in the Exchange Offer for the
purpose of distributing or participating in a distribution of the Exchange
Notes, such holder cannot rely on the position of the staff of the Commission
enunciated in such no-action letters or any similar interpretive letters, and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Further, each broker-dealer that
receives Exchange Notes for its own account in exchange for Existing Notes,
where such Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
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As contemplated by these no-action letters and the Registration Agreement,
each holder accepting the Exchange Offer is required to represent to the Company
in the Letter of Transmittal that (i) the Exchange Notes are to be acquired by
the holder or the person receiving such Exchange Notes, whether or not such
person is the holder, in the ordinary course of business, (ii) the holder or any
such other person (other than a broker-dealer referred to in the next sentence)
is not engaging, and does not intend to engage, in the distribution of the
Exchange Notes, (iii) the holder or any such other person has no arrangement or
understanding with any person to participate in the distribution of the Exchange
Notes, (iv) neither the holder nor any such other person is an "affiliate" of
the Company within the meaning of Rule 405 under the Securities Act, and (v) the
holder or any such other person acknowledges that if such holder or other person
participates in the Exchange Offer for the purpose of distributing the Exchange
Notes, it must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale of the Exchange Notes and
cannot rely on those no-action letters. As indicated above, each broker-dealer
that receives any Exchange Notes for its own account in exchange for Existing
Notes must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. For a description of the procedures for such
resales by broker-dealers, see "Plan of Distribution."
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following general discussion summarizes certain material U.S. federal
income tax consequences to Tendering Holders of (i) the exchange of Existing
Notes for Exchange Notes and (ii) the ownership and disposition of Exchange
Notes. This discussion is a summary for general informational purposes only and
does not consider all aspects of U.S. federal income taxation that may be
relevant to a particular Tendering Holder in light of such Tendering Holder's
individual investment circumstances. This discussion also does not address the
U.S. federal income tax consequences of ownership of Notes not held as capital
assets within the meaning of Section 1221 of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), or the U.S. federal income tax consequences to
certain types of Tendering Holders subject to special treatment under the U.S.
federal income tax laws, such as dealers in securities or foreign currency, tax-
exempt entities, financial institutions, insurance companies, persons that hold
the Notes as part of a "straddle", "hedge" or "conversion transaction," persons
that have a "functional currency" other than the U.S. dollar, and investors in
pass-through entities. In addition, this discussion does not describe any tax
consequences arising under U.S. federal gift and estate taxes (except to the
limited extent set forth below under "Non-U.S. Holders"), nor any consequences
arising under the laws of any state, locality or foreign jurisdiction.
This discussion is based upon the Code, the Treasury Regulations promulgated
thereunder (including temporary regulations), administrative interpretations and
judicial authority, in each case as in effect as of the date hereof. All of the
foregoing are subject to change at any time, possibly with retroactive effect.
EACH TENDERING HOLDER SHOULD CONSULT WITH SUCH TENDERING HOLDER'S OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH TENDERING HOLDER OF
PARTICIPATION IN THE EXCHANGE OFFER, AND THE OWNERSHIP AND DISPOSITION OF
EXCHANGE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.
U.S. HOLDERS
The following discussion is limited to certain material U.S. federal income
tax consequences relevant to a holder of a Note that is (i) a citizen or
resident (as defined in Section 7701(b)(1) of the Code) of the United States,
(ii) a corporation or other entity organized under the laws of the United States
or any political subdivision thereof or therein, (iii) an estate, the income of
which is subject to U.S. federal income tax regardless of the source, or (iv) a
trust with respect to the administration of which a court within the United
States is able to exercise primary supervision and one or more U.S. persons have
the authority to control all substantial decisions of the trust (a "U.S.
Holder"). Certain material U.S. federal income tax consequences relevant to a
holder other than a U.S. Holder are discussed separately below.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF TENDERING EXISTING NOTES
The exchange of Existing Notes for Exchange Notes pursuant to the Exchange
Offer should not be a taxable exchange for U.S. federal income tax purposes.
Accordingly, the Exchange Offer should have no U.S. federal income tax
consequences to U.S. Holders. A U.S. Holder should have the same adjusted basis
and holding period in the Exchange Note as it had in the Existing Note
immediately before the exchange.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF OWNING EXCHANGE NOTES
INTEREST
Generally, interest paid on the Exchange Notes will be taxable to a U.S.
Holder as ordinary income at the time it accrues or is received in accordance
with such holder's method of accounting for U.S. federal income tax purposes. In
certain cases, in the event the Company does not comply with certain covenants
set forth in the Registration Agreement, the Company will be obligated to pay
certain liquidated damages
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to the holders of the Exchange Notes. The Company believes that the contingency
that the Company will pay such additional amounts is "remote" within the meaning
of applicable Treasury Regulations. On that basis, the Company believes that
such additional amounts, if any, will be taxable to U.S. Holders as ordinary
income at the time it accrues or is received in accordance with each such
holder's method of accounting.
MARKET DISCOUNT
If an Exchange Note is acquired at a "market discount," some or all of any
gain realized upon a subsequent sale, other disposition, or full or partial
principal payment, of such Exchange Note may be treated as ordinary income, and
not capital gain, as described below. For this purpose, "market discount" is the
excess (if any) of the stated redemption price at maturity of a debt obligation
over the basis of such debt obligation immediately after its acquisition by the
taxpayer, subject to a statutory de minimis exception. Unless a U.S. Holder has
elected to include the market discount in income as it accrues, gain, if any,
realized on any subsequent disposition (other than in connection with certain
nonrecognition transactions) or full or partial principal payment of such
Exchange Note will be treated as ordinary income to the extent of the market
discount that is treated as having accrued during the period such U.S. Holder
held such Exchange Note.
The amount of market discount treated as having accrued will be determined
either (i) on a straight-line basis by multiplying the market discount times a
fraction, the numerator of which is the number of days the Exchange Note was
held by the U.S. Holder and the denominator of which is the total number of days
after the date such U.S. Holder acquired the Exchange Note up to and including
the date of its maturity or (ii) if the U.S. Holder so elects, on a constant
interest rate method. A U.S. Holder may make that election with respect to any
Exchange Note but, once made, such election is irrevocable.
A U.S. Holder of an Exchange Note acquired at a market discount may elect to
include market discount in income currently, through the use of either the
straight-line inclusion method or the elective constant interest method in lieu
of recharacterizing gain upon disposition as ordinary income to the extent of
accrued market discount at the time of disposition. Once made, this election
will apply to all notes and other obligations acquired by the electing U.S.
Holder at a market discount during the taxable year for which the election is
made, and all subsequent taxable years, unless the Internal Revenue Service (the
"IRS") consents to a revocation of the election. If an election is made to
include market discount in income currently, the basis of the Exchange Note in
the hands of the U.S. Holder will be increased by the market discount thereon as
it is included in income.
Unless a U.S. Holder who acquires an Exchange Note at a market discount
elects to include market discount in income currently, such U.S. Holder may be
required to defer deductions for any interest paid on indebtedness allocable to
such Exchange Note in an amount not exceeding the deferred income, until such
income is realized.
BOND PREMIUM
If a U.S. Holder purchases an Exchange Note and immediately after the
purchase the adjusted basis of the Exchange Note exceeds the sum of all amounts
payable on the instrument after the purchase date (other than qualified stated
interest), the Exchange Note will be treated as having been acquired with "bond
premium." A U.S. Holder may elect to amortize such bond premium over the
remaining term of such Exchange Note (or, if it results in a smaller amount of
amortizable bond premium, until an earlier call date).
If bond premium is amortized, the amount of interest that must be included
in the U.S. Holder's income for each period ending on an interest payment date
or at the stated maturity, as the case may be, will, except as Treasury
Regulations may otherwise provide, be reduced by the portion of premium
allocable to such period based on the Exchange Note's yield to maturity. If such
an election to amortize
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bond premium is not made, a U.S. Holder must include the full amount of each
interest payment in income in accordance with its regular method of accounting
and will receive a tax benefit from the premium only in computing such U.S.
Holder's gain or loss upon the sale or other disposition or full or partial
principal payment of the Exchange Note.
An election to amortize bond premium will apply to amortizable bond premium
on all notes and other bonds, the interest on which is includible in the U.S.
Holder's gross income, held at the beginning of the U.S. Holder's first taxable
year to which the election applies or that are thereafter acquired, and may be
revoked only with the consent of the IRS. A U.S. Holder who elects to amortize
bond premium must reduce its adjusted basis in the Exchange Notes by the amount
of such allowable amortization.
SALE, EXCHANGE OR REDEMPTION OF THE EXCHANGE NOTES
Upon the disposition of an Exchange Note by sale, exchange or redemption
(including pursuant to an offer by the Company), a U.S. Holder will generally
recognize gain or loss equal to the difference between (i) the amount of cash
plus the fair market value of any property received upon such sale, exchange or
redemption (other than amounts attributable to accrued interest not yet taken
into income) and (ii) the U.S. Holder's adjusted tax basis in the Exchange Note.
Generally, a U.S. Holder's adjusted tax basis in an Exchange Note will equal the
cost of the Exchange Note to the U.S. Holder increased by any market discount
included in income and reduced by any bond premium amortized by the U.S. Holder.
Assuming the Exchange Note is held as a capital asset, such gain or loss
(except to the extent that the market discount rules otherwise provide) will
generally constitute capital gain or loss, which will be either long-term or
short-term if the U.S. Holder is a corporation; or long-term, mid-term or
short-term if the U.S. Holder is a non-corporate entity, depending on the U.S.
Holder's holding period.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under the Code, a U.S. Holder of an Exchange Note may be subject, under
certain circumstances, to information reporting and/or backup withholding at a
31% rate with respect to payments of interest or the gross proceeds from the
sale, exchange or redemption of an Exchange Note. This withholding applies only
if a U.S. Holder (i) fails to furnish its social security or other taxpayer
identification number ("TIN") within a reasonable time after a request therefor,
(ii) furnishes an incorrect TIN, (iii) fails to report interest or dividends
properly, or (iv) fails, under certain circumstances, to provide a certified
statement, signed under penalty or perjury, that the TIN provided is its correct
number and that it is not subject to backup withholding. Any amount withheld
from a payment to a U.S. Holder under the backup withholding rules is allowable
as a credit (and may entitle such holder to a refund) against such holder's U.S.
federal income tax liability, provided that the required information is
furnished to the IRS. Certain persons are exempt from backup withholding,
including corporations and financial institutions. Holders of Exchange Notes
should consult their tax advisors as to their qualification for exemption from
withholding and the procedure for obtaining such exemption.
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NON-U.S. HOLDERS
The following discussion is limited to certain material U.S. federal income
tax consequences relevant to a holder of a Note who, for U.S. federal income tax
purposes, is (i) a nonresident alien individual, (ii) a foreign corporation,
(iii) a foreign estate which is not subject to U.S. federal income tax on a net
income basis in respect of income or gain from a Note or (iv) a trust if a U.S.
court is not able to exercise primary supervision over administration of the
trust or one or more U.S. persons do not have the authority to control all
substantial decisions of the trust (a "Non-U.S. Holder").
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(a) payments of principal and interest on the Notes by the Company or
any paying agent to any Non-U.S. Holder will not be subject to U.S. federal
withholding tax, provided that, in the case of interest, (i) such Non-U.S.
Holder does not own, actually or constructively, ten percent or more of the
total combined voting power of all classes of stock of the Company entitled
to vote, is not a controlled foreign corporation related, directly or
indirectly, to the Company through stock ownership, and is not a bank
receiving interest described in Section 881(c)(3)(A) of the Code and (ii)
the beneficial owner fulfills the statement requirement set forth in Section
871(h) or Section 881(c) of the Code;
(b) a Non-U.S. Holder of a Note will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or other disposition of
such Note unless (i) subject to certain exceptions, such Non-U.S. Holder is
an individual who is present in the United States for 183 days or more
during the taxable year of disposition and certain other requirements are
met; (ii) such gain is effectively connected with the conduct by such
Non-U.S. Holder of a trade or business in the United States; or (iii) the
Non-U.S. Holder is subject to tax pursuant to the provisions of the Code
applicable to certain former citizens and residents of the United States;
and
(c) a Note or coupon held by an individual who is not a citizen or
resident of the United States at the time of his death will not be subject
to U.S. federal estate tax as a result of such individual's death, provided
that the individual does not own, actually or constructively, ten percent or
more of the total combined voting power of all classes of stock of the
Company entitled to vote and, at the time of the individual's death,
payments with respect to such Note would not have been effectively connected
to the conduct by such individual of a trade or business in the United
States.
Sections 871(h) and 881(c) of the Code require that, in order to obtain the
portfolio interest exemption from U.S. federal withholding tax described in
paragraph (a) above, either the beneficial owner or a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution") and that is holding the Note on behalf of such beneficial owner
file a statement with the withholding agent to the effect that the beneficial
owner of the Note is not a United States person. Under temporary United States
Treasury Regulations, such requirement will be fulfilled if the beneficial owner
of a Note certifies on Internal Revenue Service Form W-8, under penalties of
perjury, that he is not a United States person and provides his name and
address, and any Financial Institution holding the Note on behalf of the
beneficial owner certifies that such a statement has been received from the
beneficial owner by it, or by a Financial Institution between it and the
beneficial owner, and furnishes the withholding agent with a copy thereof. A
Form W-8 generally remains in effect for three calendar years.
Interest paid to a Non-U.S. Holder may also be exempt from U.S. withholding
taxes provided such Non U.S. Holder delivers (i) IRS Form 1001 signed by the
beneficial owner of the Note or such holder's agent claiming complete exemption
from withholding under an applicable tax treaty, or (ii) IRS Form 4224 signed by
the beneficial owner of the Note or such owner's agent claiming exemption from
withholding tax on income connected with the conduct of a trade or business in
the United States; provided that, in any
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such case (x) the applicable form is delivered pursuant to applicable procedures
and is properly transmitted to the United States entity otherwise required to
withhold tax and (y) none of the entities receiving the form has actual
knowledge that the Non-U.S. Holder is a U.S. person or that any certification on
the form is false. Under recently enacted legislation, Non-U.S. Holders that are
classified as partnerships for U.S. federal income tax purposes but classified
as corporations for foreign tax purposes may not be entitled to the benefits of
otherwise applicable U.S. tax treaties.
Recently adopted Treasury Regulations not yet in effect (the "Final
Regulations"), would alter the foregoing rules in certain respects. In general,
the Final Regulations are effective January 1, 1999. Under the Final
Regulations, a Non-U.S. Holder seeking an exemption under (i) or (ii) of the
preceding paragraph would generally be required to provide a beneficial owner
certificate on Form W-8, which form may include, among other things, the
Non-U.S. Holder's taxpayer identification number. The Final Regulations also
provide special rules to determine whether, for purposes of determining the
applicability of a tax treaty, interest paid to a Non-U.S. Holder that is an
entity should be treated as paid to the entity or those holding an interest in
the entity. The foregoing is not intended to be a complete discussion of the
provisions of the Final Regulations, and Non-U.S. Holders are urged to consult
their advisors with respect to the effect that the Final Regulations will have
when they become effective.
Backup Withholding and Information Reporting
Under current U.S. federal income tax law, a 31% backup withholding tax and
information reporting requirements apply to certain payments of principal and
interest made to, and to the proceeds of sales before maturity by, certain
noncorporate United States persons. Under current Treasury Regulations, backup
withholding will not apply to payments made on a Note if the certifications
required by Sections 871(h) and 881(c) of the Code (described above) are
received, provided that the Company or such paying agent, as the case may be,
does not have actual knowledge that the payee is a United States person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a Note made to or through a foreign office of a broker will not
be subject to backup withholding. However, if such broker is a United States
person, a controlled foreign corporation for U.S. tax purposes, or a foreign
person 50% or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period or certain other
foreign entities with a U.S. connection, information reporting will be required
unless the broker has in its records documentary evidence that the beneficial
owner is not a United States person and certain conditions are met or the
beneficial owner otherwise establishes an exemption. Payments to or through the
United States office of a broker will be subject to backup withholding and
information reporting unless the Non-U.S. Holder certifies, under penalties of
perjury, that it is not a United States person or otherwise establishes an
exemption.
The Final Regulations would provide certain presumptions under which a
Non-U.S. Holder would be subject to backup withholding and information reporting
unless the Non-U.S. Holder provides a certification of non-U.S. status.
Non-U.S. Holders should consult their tax advisors regarding the application
of information reporting and backup withholding in their particular situations,
the availability of an exemption therefrom, and the procedure for obtaining such
an exemption, if available. Any amounts withheld from a payment to a Non-U.S.
Holder under the backup withholding rules will be allowed as a credit against
such Non-U.S. Holder's U.S. federal income tax liability and may entitle such
Non-U.S. Holder to a refund, provided that the required information is furnished
to the United States Internal Revenue Service.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Existing
Notes, where such Exchange Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days (exclusive of any period during which any stop order shall be
in effect suspending the effectiveness of the Registration Statement) after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until , all dealers effecting transactions in the Exchange Notes
may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes, or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commission or concessions from any such
broker-dealer and/ or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensations under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date (exclusive of any period
during which any stop order shall be in effect suspending the effectiveness of
the Registration Statement), the Company will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents pursuant to a Letter of Transmittal.
The Company has agreed to pay all expenses incident to the Exchange Offer
(including the expenses of one counsel for certain holders of the Existing
Notes) other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Existing Notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the Company
by Weil, Gotshal & Manges LLP, New York City, New York.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996
incorporated by reference in this Prospectus and elsewhere in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as stated in their report thereon included therein and incorporated
herein by reference in reliance upon said firm as experts in accounting and
auditing.
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GLOSSARY OF SELECTED INDUSTRY TERMS
ANCHOR HANDLING TOWING SUPPLY VESSELS. Anchor handling towing supply
vessels are equipped with winches capable of towing drilling rigs and lifting
and positioning their anchors and other marine equipment. They range in size and
capacity and are usually characterized in terms of horsepower and towing
capacity. For Gulf of Mexico service, anchor handling towing supply vessels
typically require 6,000 horsepower or more to position and service
semi-submersible rigs drilling in deep water areas.
BAREBOAT CHARTER. This is a lease arrangement under which the lessee
(charterer) is responsible for all crewing, insurance and operating expenses, as
well as the payment of the bareboat charter hire to the vessel owner.
CREW BOATS. Crew boats transport personnel and cargo to and from production
platforms and rigs. Older crew boats, early-1980's built, are generally 100 to
110 ft. in length and are generally designed for speed to transport personnel.
Newer crew boat designs are generally larger, 130 to 160 ft. in length, and have
greater cargo carrying capacities. They are used primarily to transport cargo on
a time-sensitive basis.
FREIGHT VESSELS. Freight vessels have a substantial amount of clear deck
space for cargo and adequate stability to handle tiers of containers or
overdimensional cargo. Speed and fuel consumption are also important factors in
this vessel category.
LINE HANDLING VESSELS. Line handling vessels are outfitted with special
equipment to assist tankers while they are loading at single buoy moorings. They
have a high degree of maneuverability, are well-tendered and include pollution
dispersal capability.
OIL SPILL RESPONSE VESSELS. Oil spill response vessels are specially
equipped to respond to oil spill emergencies and are certified as such by the
U.S. Coast Guard.
OVERALL UTILIZATION. For any vessel with respect to any period, the ratio
of aggregate number of days worked by such vessel to total calendar days
available during such period.
PREMIUM JACKUP DRILLING RIGS. Jackup drilling rigs stand on elevating
support legs which extend to the ocean floor with their hull and drilling
equipment elevated above the water. "Premium" designation generally indicates
suitability for water depths exceeding 300 feet.
PROJECT AND GEOPHYSICAL VESSELS. These vessels generally have special
features to meet the requirements of specific jobs. The special features include
large deck spaces, high electrical generating capacities, slow controlled speed
and unique thrusters, extra berthing facilities and long range capabilities.
These vessels are primarily used for well stimulation and for the deployment of
seismic data gathering equipment.
RATE PER DAY WORKED. For any vessel with respect to any period, the ratio
of total charter revenue of such vessel to the aggregate number of days worked
of such vessel for such period.
STANDBY SAFETY VESSELS. Standby safety vessels operate in the U.K. sector
of the North Sea. They typically remain on station to provide a safety backup to
offshore rigs and production facilities, carry special equipment to rescue
personnel, are equipped to provide first aid and shelter and, in some cases,
also function as supply vessels.
SUPPLY VESSELS. Supply vessels serve drilling and production facilities and
support offshore construction and maintenance work. They are differentiated from
other vessels by cargo flexibility and capacity. The size of a vessel typically
determines deck capacity, although vessels constructed after 1979 with exhaust
stacks forward have better configurations for cargo stowage and handling. In
addition to deck cargo, such as pipe or drummed materials on pallets, supply
vessels transport liquid mud, potable and drill water, diesel fuel and dry bulk
cement. Generally, customers prefer vessels with large liquid mud and bulk
cement
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capacity and large areas of clear deck space. For certain jobs, other
characteristics such as maneuverability, fuel efficiency or firefighting
capability may also be important.
TOWING SUPPLY VESSELS. These vessels perform the same functions as supply
vessels but are equipped with more powerful engines (3,000 to 5,000 horsepower)
and towing winches, giving them the added capability to perform general towing
duties, buoy setting and limited anchor handling work. Towing supply vessels are
primarily used in international operations, which require the additional
versatility that these vessels offer relative to supply vessels.
UTILITY BOATS. These vessels provide service to offshore production
facilities and also support offshore maintenance and construction work. Their
capabilities include the transportation of fuel, water, deck cargo and
personnel. They range in length from 96 feet to 135 feet and can, depending on
the vessel design, have enhanced features such as firefighting and pollution
response capabilities.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
OFFERING MEMORANDUM IN CONNECTION WITH THE OFFER MADE BY THIS OFFERING
MEMORANDUM AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INITIAL
PURCHASERS. NEITHER THE DELIVERY OF THIS OFFERING MEMORANDUM NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS GIVEN IN THIS OFFERING MEMORANDUM. THIS OFFERING MEMORANDUM DOES
NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information........................... 3
Incorporation of Certain Documents
by Reference.................................. 5
Summary......................................... 6
Risk Factors.................................... 16
Use of Proceeds................................. 19
Capitalization.................................. 19
Selected Historical Financial Information....... 20
Pro Forma Financial Statements.................. 22
The Company..................................... 27
Business........................................ 28
1996 Transactions............................... 37
Description of Exchange Notes................... 38
The Exchange Offer.............................. 49
Certain U.S. Federal Income Tax
Considerations................................ 60
Plan of Distribution............................ 65
Legal Matters................................... 65
Experts......................................... 65
Glossary of Selected Industry Terms............. 66
</TABLE>
$150,000,000
SENIOR NOTES
SEACOR SMIT INC.
OFFER TO EXCHANGE
7.20% SENIOR NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR
7.20% SENIOR NOTES DUE 2009
WHICH HAVE NOT BEEN SO REGISTERED
---------------------
PROSPECTUS
---------------------
, 1997
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As more fully described below, Section 145 of the Delaware General
Corporation Law (the "DGCL") permits Delaware corporations to indemnify each of
their present and former directors or officers under certain circumstances,
provided that such persons acted in good faith and in a manner which they
reasonably believed to be in, or not opposed to, the best interests of the
corporation. Article III of the Company's Amended and Restated By-laws provides
that the Company shall indemnify, to the fullest extent permitted by Section 145
of the DGCL, as the same may be amended from time to time, all persons whom it
may indemnify pursuant to such section.
Specifically, Section 145 of the DGCL provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, or, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
Section 145 of the DGCL also provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon adjudication that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Any such indemnification (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above.
Section 145 of the DGCL permits a Delaware business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation,
II-1
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or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against such person and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the corporation would have the power to indemnify such person.
Section 102(b) of the DGCL enables a Delaware corporation to include a
provision in its certificate of incorporation limiting a director's liability to
the corporation or its stockholders for monetary damages for breaches of
fiduciary duty as a director. The Company's Certificate of Incorporation
contains provisions that limit the personal liability of each director to the
Registrant or its stockholders for monetary damages for breach of the fiduciary
duty of care as a director. These provisions eliminate personal liability to the
fullest extent permitted by the Delaware General Corporation Law.
ITEM 21. EXHIBITS
(a) Exhibits
<TABLE>
<S> <C>
Exhibit 4.1 --Indenture between the Company and First Trust National Association, as
Trustee, dated as of September 22, 1997.*
Exhibit 4.2 --Purchase Agreement, dated as of September 15, 1997, between the Company and
Salomon Brothers Inc, individually and as representative of the Initial
Purchasers.*
Exhibit 4.3 --Registration Agreement, dated as of September 22, 1997, between the Company
and the Initial Purchasers.*
Exhibit 4.4 --Form of Exchange Note 7.20% Senior Notes Due 2009 (included in Exhibit 4.1).
Exhibit 5 --Opinion of Weil, Gotshal & Manges LLP regarding validity of Exchange Notes
being registered.*
Exhibit 12 --Statement regarding the computation of the ratio of earnings to fixed
charges.*
Exhibit --Consent of Arthur Andersen LLP, Independent Public Accountants for the
23.1 Company.*
Exhibit --Consent of Weil, Gotshal & Manges LLP (contained in the opinion filed as
23.2 Exhibit 5 hereto).
Exhibit 24 --Powers of Attorney of certain directors and officers of the Company (included
on signature pages to Registration Statement).
Exhibit 25 --Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of First Trust National Association, as trustee under the
Indenture.*
Exhibit --Form of Letter of Transmittal.*
99.1
Exhibit --Form of Notice of Guaranteed Delivery.*
99.2
</TABLE>
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* Filed herewith.
ITEM 22. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13 (a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
II-2
<PAGE>
(2) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, pursuant to the provisions described under Item 15 or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(3) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(4) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York on October 27, 1997.
SEACOR SMIT INC.
By: /s/ RANDALL BLANK
-----------------------------------------
Randall Blank
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND SECRETARY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Charles
Fabrikant and Randall Blank and each of them, with full power to act without the
other, as true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities (until revoked in writing), to sign any and all amendments or
supplements (including post-effective amendments thereto) to this Form S-4
Registration Statement of SEACOR SMIT Inc. and any registration statement filed
pursuant to Rule 462 and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorneys-in-fact and agents, full power and authority
to do and perform each and every act and thing requisite and necessary fully to
all intents and purposes as he might or could do in person, thereby ratifying
and confirming all that each of said attorneys-in-fact and agents, or their or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
/s/ CHARLES FABRIKANT Directors,
- ------------------------------ President and Chief October 27, 1997
Charles Fabrikant Executive Officer
Executive Vice President,
Chief
/s/ RANDALL BLANK Financial Officer and
- ------------------------------ Secretary October 27, 1997
Randall Blank (Principal Financial
Officer)
/s/ GRANVILLE E. CONWAY
- ------------------------------ Director October 27, 1997
Granville E. Conway
/s/ MICHAEL E. GELLERT
- ------------------------------ Director October 27, 1997
Michael E. Gellert
/s/ ANTOON KIENHUIS
- ------------------------------ Director October 27, 1997
Antoon Kienhuis
II-4
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ STEPHEN STAMAS
- ------------------------------ Director October 27, 1997
Stephen Stamas
/s/ RICHARD M. FAIRBANKS III
- ------------------------------ Director October 27, 1997
Richard M. Fairbanks III
/s/ PIERRE DE DEMANDOLX
- ------------------------------ Director October 27, 1997
Pierre de Demandolx
Vice President and
/s/ LENNY P. DANTIN Treasurer (Principal
- ------------------------------ Accounting Officer and October 27, 1997
Lenny P. Dantin Controller)
II-5
<PAGE>
EXHIBIT 4.1
EXECUTION COPY
- --------------------------------------------------------------------------------
INDENTURE
Between
SEACOR SMIT INC.
and
FIRST TRUST NATIONAL ASSOCIATION
dated as of
September 22, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by
Reference
SECTION 1.01. Definitions...................................... 1
SECTION 1.02. Other Definitions................................ 8
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.................................... 8
SECTION 1.04 Rules of Construction............................ 9
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating.................................. 10
SECTION 2.02. Execution and Authentication..................... 10
SECTION 2.03. Registrar and Paying Agent....................... 11
SECTION 2.04. Paying Agent to Hold Money
in Trust......................................... 11
SECTION 2.05. Securityholder Lists............................. 12
SECTION 2.06. Transfer and Exchange............................ 12
SECTION 2.07. Replacement Securities........................... 13
SECTION 2.08. Outstanding Securities........................... 13
SECTION 2.09. Temporary Securities............................. 14
SECTION 2.10. Cancelation...................................... 14
SECTION 2.11. Defaulted Interest............................... 14
SECTION 2.12. CUSIP Numbers.................................... 14
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee............................... 15
SECTION 3.02. Selection of Securities To Be
Redeemed......................................... 15
SECTION 3.03. Notice of Redemption............................. 15
SECTION 3.04. Effect of Notice of Redemption................... 16
SECTION 3.05. Deposit of Redemption Price...................... 17
SECTION 3.06. Securities Redeemed in Part...................... 17
ii
<PAGE>
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities............................ 17
SECTION 4.02. SEC Reports...................................... 17
SECTION 4.03. Compliance Certificate........................... 18
SECTION 4.04. Further Instruments and Acts..................... 18
SECTION 4.05. Corporate Existence.............................. 18
SECTION 4.06. Limitation on Liens.............................. 18
SECTION 4.07. Limitation on Sale and
Leaseback........................................ 19
SECTION 4.08. Exempted Indebtedness............................ 19
SECTION 4.10. Waiver of Stay; Extension
of Usury Laws.................................... 20
ARTICLE 5
Consolidation, Merger, Conveyance,
Transfer or Lease
SECTION 5.01. Company May Consolidate, etc., Only on
Certain Terms.................................... 20
SECTION 5.02. Successor Substituted............................ 21
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default................................ 21
SECTION 6.02. Acceleration of Maturity; Rescission
and Annulment.................................... 24
SECTION 6.03. Collection of Indebtedness and Suits
for Enforcement by Trustee....................... 25
SECTION 6.04. Trustee May File Proofs
of Claim......................................... 26
SECTION 6.05. Trustee May Enforce Claims Without
Possession of Securities......................... 27
SECTION 6.06. Application of Money Collected................... 27
SECTION 6.07. Limitation on Suits.............................. 27
SECTION 6.08. Unconditional Right of Holders to
Receive Principal, Premium
and Interest..................................... 28
SECTION 6.09. Restoration of Rights and Remedies............... 28
SECTION 6.10. Rights and Remedies Cumulative................... 29
SECTION 6.11. Delay or Omission Not Waiver..................... 29
SECTION 6.12. Control by Holders............................... 29
iii
<PAGE>
SECTION 6.13. Waiver of Past Defaults.......................... 29
SECTION 6.14. Undertaking for Costs............................ 30
SECTION 6.15. Waiver of Usuary, Stay or Extension
Laws............................................. 30
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee................................ 30
SECTION 7.02. Rights of Trustee................................ 32
SECTION 7.03. Individual Rights of Trustee..................... 33
SECTION 7.04. Trustee's Disclaimer............................. 33
SECTION 7.05. Notice of Defaults............................... 33
SECTION 7.06. Reports by Trustee to Holders.................... 33
SECTION 7.07. Compensation and Indemnity....................... 33
SECTION 7.08. Replacement of Trustee........................... 34
SECTION 7.09. Successor Trustee by Merger...................... 35
SECTION 7.10. Eligibility; Disqualification.................... 36
SECTION 7.11. Preferential Collection of Claims
Against Company.................................. 36
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance....................................... 36
SECTION 8.02. Conditions to Defeasance......................... 37
SECTION 8.03. Application of Trust Money....................... 39
SECTION 8.04. Repayment to Company............................. 39
SECTION 8.05. Indemnity for Government
Obligations...................................... 39
SECTION 8.06. Reinstatement.................................... 39
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders....................... 40
SECTION 9.02. With Consent of Holders.......................... 40
SECTION 9.03. Compliance with Trust Indenture Act.............. 41
SECTION 9.04. Revocation and Effect of Consents and
Waivers.......................................... 41
SECTION 9.05. Notation on or Exchange of
Securities....................................... 42
SECTION 9.06. Trustee To Sign Amendments....................... 42
SECTION 9.07. Payment for Consent.............................. 42
iv
<PAGE>
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls..................... 43
SECTION 10.02. Notices.......................................... 43
SECTION 10.03. Communication by Holders with Other
Holders.......................................... 44
SECTION 10.04. Certificate and Opinion as to
Conditions Precedent............................. 44
SECTION 10.05. Statements Required in Certificate or
Opinion.......................................... 44
SECTION 10.06. When Securities Disregarded...................... 45
SECTION 10.07. Rules by Trustee, Paying Agent and
Registrar........................................ 45
SECTION 10.08. Legal Holidays................................... 45
SECTION 10.09. Governing Law.................................... 45
SECTION 10.10. No Recourse Against Others....................... 46
SECTION 10.11. Successors....................................... 46
SECTION 10.12. Multiple Originals............................... 46
SECTION 10.13. Table of Contents; Headings...................... 46
v
<PAGE>
INDENTURE dated as of September 22, 1997,
between SEACOR SMIT INC., a Delaware corporation (the
"Company"), and FIRST TRUST NATIONAL ASSOCIATION, a
national banking association (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
7.20% Senior Notes Due 2009 (the "Initial Securities") and, if and when issued
pursuant to a registered exchange for Initial Securities, the Company's 7.20%
Senior Notes Due 2009 (the "Exchange Securities") and if and when issued
pursuant to a private exchange for Initial Securities, the Company's 7.20%
Senior Notes Due 2009 (the "Private Exchange Securities", together with the
Exchange Securities and the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions.
-----------
"Affiliate" means another Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such first Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of Voting Stock or by
contract or otherwise.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
<PAGE>
2
"Business Day" means each day which is not a Legal
Holiday.
"Capitalized Lease Obligation" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles; and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Net Tangible Assets" means the total amount of
assets (less applicable reserves and other properly deductible items) after
deducting (1) all current liabilities (excluding the amount of those which are
by their terms extendable or renewable at the option of the obligor to a date
more than 12 months after the date as of which the amount is being determined)
and (2) all goodwill, tradenames, trademarks, patents, unamortized debt discount
and expense and other like intangible assets, all as set forth on the most
recent balance sheet of the Company and its consolidated Subsidiaries and
determined in accordance with GAAP.
<PAGE>
3
"Consolidated Net Worth" means the excess of assets over
liabilities of the Company and its consolidated Subsidiaries, plus Minority
Interests, as determined from time to time in accordance with GAAP.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
<PAGE>
4
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning. The accretion of principal
of a non-interest bearing or other discount security shall be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, at any date,
any of the following, without duplication, (i) any liability, contingent or
otherwise, of such Person (A) for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (B) evidenced by a Security, bond, debenture or similar instrument or
(C) for the payment of money relating to a Capitalized Lease Obligation or other
obligation (whether issued or assumed) relating to the deferred purchase price
of property; (ii) all conditional sale obligations and all obligations under any
title retention agreement (even if the rights and remedies of the seller under
such agreement in the event of default are limited to repossession or sale of
such property), but excluding trade accounts payable arising in the ordinary
course of business; (iii) all obligations for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction other
than entered into in the ordinary course of business; (iv) all indebtedness of
others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on any asset or
property (including, without limitation, leasehold interests and any other
tangible or intangible property) of such Person, whether or not such
indebtedness is assumed by such Person or is not otherwise such Person's legal
liability; provided, that if the obligations so secured have not been assumed in
<PAGE>
5
full by such Person or are otherwise not such Person's legal liability in full,
the amount of such indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such indebtedness secured by such Lien or
the fair market value of the assets of the property securing such Lien; (v) all
indebtedness of others (including all interest and dividends on any Indebtedness
or Preferred Stock of any other Person for the payment of which is) guaranteed,
directly or indirectly, by such Person or that is otherwise its legal liability
or which such Person has agreed to purchase or repurchase or in respect of which
such Person has agreed contingently to supply or advance funds; and (vi)
obligations in respect of Currency Agreements and Interest Rate Agreements (as
such capitalized terms are defined in the Indenture).
"Indenture" means this Indenture as amended or
supplemented from time to time.
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Issue Date" means the date on which the
Securities are originally issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien, charge or adverse claim affecting title or resulting in an
encumbrance against real or personal property or a security interest of any kind
(including, without limitation, any conditional sale or other title retention
agreement or lease in the nature thereof or any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect ownership by a third
<PAGE>
6
party or property leased to the Company or any of its Subsidiaries under a lease
that is not in the nature of a conditional sale or title retention agreement).
"Minority Interest" means any shares of stock of any class of
a Subsidiary that are not owned by the Company or a Subsidiary.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed
by two Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Liens" means, with respect to any Person: (i) Liens
existing on the Issue Date; (ii) Liens on property or assets of, or any shares
of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Subsidiary of the Company or at the time such corporation
is merged into the Company or any of its Subsidiaries; (iii) Liens in favor of
the Company or any of its Subsidiaries; (iv) Liens in favor of governmental
bodies to secure progress or advance payments; (v) Liens securing industrial
revenue or pollution control bonds; (vi) Liens on Property to secure
Indebtedness incurred for the purpose of (a) financing all or any part of the
purchase price of such Property incurred prior to, at the time of, or within 180
days after, the acquisition of such Property or (b) financing all or any part of
the cost of construction, improvement, development or expansion of any such
Property; (vii) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made therefor; (viii) Liens on current
assets of Subsidiaries securing Indebtedness of such Subsidiaries; and (ix) any
extensions, substitutions, replacements or renewals in whole or in part of a
Lien (an "existing Lien") enumerated in clauses (i) through (viii) above;
provided that the Lien may not extend beyond (A) the Property or Indebtedness
subject to the existing Lien and
<PAGE>
7
(B) improvements and construction on such Property and the Indebtedness secured
by the Lien may not exceed the Indebtedness secured at the time by the existing
Lien.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Principal Property" means any Property owned or leased by the
Company or any Subsidiary, the gross book value of which exceeds one percent of
Consolidated Net Worth.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Sale and Leaseback Transaction" means any arrangement with
any Person pursuant to which the Company or any Subsidiary leases any Principal
<PAGE>
8
Property that has been or is to be sold or transferred by the Company or the
Subsidiary to such Person, other than (1) temporary leases for a term, including
renewals at the option of the lessee, of not more than five years, (2) leases
between the Company and a Subsidiary or between Subsidiaries, (3) leases of
Principal Property executed by the time of, or within 12 months after the latest
of, the acquisition, the completion of construction or improvement, or the
commencement of commercial operation of the Principal Property, and (4)
arrangements pursuant to any provision of law with an effect similar to the
former Section 168(f)(8) of the Internal Revenue Code of 1954.
"SEC" means the Securities and Exchange
Commission.
"Securities" means the Securities issued under
this Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity," when used with respect to any security or
any installment of interest thereon, means the date specified in such security
as the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subsidiary" of any Person means (i) any Person of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more of the Subsidiaries of that
Person or a combination thereof, and (ii) any partnership, joint venture or
other Person in which such Person or one or more of the Subsidiaries of that
Person or a combination thereof has the power to control by contract or
otherwise the board of directors or equivalent governing body or otherwise
controls such entity.
<PAGE>
9
"TIA" means the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
-----------------
<PAGE>
10
Defined in
Term Section
---- ----------
"covenant defeasance option" ........... 8.01(b)
"Event of Default" ..................... 6.01
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 10.08
"Paying Agent" ......................... 2.03
"Registrar"............................. 2.03
SECTION 1.03. Incorporation by Reference of Trust Indenture
---------------------------------------------
Act. This Indenture is subject to the mandatory provisions of the TIA which are
- ---
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a
Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
<PAGE>
11
SECTION 1.04. Rules of Construction. Unless the
---------------------
context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were originally
issued.
<PAGE>
12
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. Provisions relating to the
---------------
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to Appendix A
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
----------------------------
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the Secu-
rities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
<PAGE>
13
The Trustee shall authenticate and deliver Securities for
original issue upon a written order of the Company signed by two Officers or by
an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed that amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
--------------------------
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
<PAGE>
14
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
-----------------------------------
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
--------------------
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee is
not the Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
<PAGE>
15
SECTION 2.06. Transfer and Exchange. The Securities shall be
---------------------
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(1)
of the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section. The Company shall not be required to make and
the Registrar need not register transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed or 15 days before an interest
payment date.
Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture will evidence the same debt and will be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
<PAGE>
16
SECTION 2.07. Replacement Securities. If a mutilated Security
----------------------
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
----------------------
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and
<PAGE>
17
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, then on and after that
date such Securities (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive
--------------------
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10. Cancelation. The Company at any time may deliver
-----------
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record reten tion requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
------------------
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
<PAGE>
18
SECTION 2.12. CUSIP Numbers. The Company in issuing the
-------------
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to
------------------
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
--------------------------------------
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
<PAGE>
19
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company promptly
of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
--------------------
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities
are to be redeemed, the identification and principal
amounts of the particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is pro hibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date;
<PAGE>
20
(7) the paragraph of the Securities pursuant to
which the Securities called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surren der to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or
----------------------------
before the redemption date, the Company shall deposit with the Paying Agent (or,
if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
<PAGE>
21
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall
---------------------
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. The Company shall file with the
-----------
Trustee and provide Securityholders, within 15 days after it files them with the
SEC, copies of its annual report and the information, documents and other
reports which the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company shall continue to file with the SEC and provide
the Trustee and Securityholders with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and reports to be so filed and provided at the times
specified for the filing of such information, documents and reports under such
Sections. The Company also shall comply with the other provisions of TIA ss.
314(a). Notwithstanding anything to the contrary herein, the Trustee shall have
no duty to review such documents for purposes of determining compliance with any
provisions of this Indenture.
<PAGE>
22
SECTION 4.03. Compliance Certificate. The Company shall
----------------------
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.04. Further Instruments and Acts. Upon request of
----------------------------
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.05. Corporate Existence. Subject to the provisions
-------------------
of Article 5, the Company will do or cause to be done all things necessary to
and will cause each of its Subsidiaries to preserve and keep in full force and
effect its corporate existence, material rights (charter and statutory) and
franchises of the Company and each of its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such material right or
franchise or the corporate existence of any of its Subsidiaries if (a) the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Subsidiary and (b) the loss thereof is not disadvantageous
in any material respect to the Holders of the Securities.
SECTION 4.06. Limitation on Liens. Subject to Article 8 (to
-------------------
the extent it is applicable to the Securities) the Company will not, and will
not permit any of its Subsidiaries to, create, incur or otherwise cause or
suffer to exist or become effective any Liens of any kind upon any Principal
Property or any shares of stock or indebtedness of any Subsidiary that owns or
<PAGE>
23
leases any Principal Property (whether such Principal Property, shares of stock
or indebtedness are now owned or hereafter acquired) unless all payments due
under this Indenture and the Securities are secured on an equal and ratable
basis with the obligations so secured until such time as such obligation is no
longer secured by a Lien, except for Permitted Liens.
The covenant contained in this Section 4.06 will be subject to
the provision for exempted Indebtedness in Section 4.08.
SECTION 4.07. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
Subject to Article 8 (to the extent it is applicable to the Securities), the
Company will not, nor will it permit any Subsidiary to, enter into any Sale and
Leaseback Transaction with respect to any Principal Property (whether such
Principal Property is now owned or hereafter acquired), unless either (i) the
Company or such Subsidiary would be entitled, in accordance with the provisions
of Section 4.06 (other than provisions with respect to exempted Indebtedness),
to incur Indebtedness secured by a Lien on such property without equally and
ratably securing the Securities, or (ii) the Company, within 180 days after the
effective date of the Sale and Leaseback Transaction, applies an amount equal to
the Value of such transaction to the voluntary retirement of its Funded Debt.
For the purposes of this Article, "Value" shall mean an amount equal to the
greater of the net proceeds of the sale or transfer of the property leased
pursuant to such Sale and Leaseback Transaction, or the fair value in the
opinion of the Board of Directors of the leased property at the time of entering
into such Sale and Leaseback Transaction. For the purposes of this Article,
"Funded Debt" shall mean indebtedness (including Securities) maturing by the
terms thereof more than one year after the original creation thereof.
The covenant contained in this Section 4.07 will be subject to
the provision for exempted Indebtedness in Section 4.08.
SECTION 4.08. Exempted Indebtedness. Notwithstanding the
---------------------
provisions contained in Sections 4.06 and 4.07, the Company and its Subsidiaries
may issue, assume, suffer to exist or guarantee Indebtedness which would
<PAGE>
24
otherwise be subject to the limitation of Section 4.06, without securing the
Securities, or may enter into Sale and Leaseback Transactions which would
otherwise be subject to the limitation of Section 4.07, without retiring Funded
Debt, or enter into a combination of such transactions, if the sum of (i) the
principal amount of all such Indebtedness incurred after the date hereof, and
which would otherwise be or have been prohibited by the limitations of Section
4.06 or 4.07 and (ii) the aggregate Value of all such Sale and Leaseback
Transactions after the date hereof does not at any such time exceed 15% of the
Consolidated Net Tangible Assets of the Company and its consolidated
Subsidiaries as shown in the audited consolidated balance sheet contained in the
latest annual report to the shareholders of the Company.
SECTION 4.10. Waiver of Stay; Extension of Usury Laws. The
---------------------------------------
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, or interest on the Securities as contemplated herein or in the
Securities, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE 5
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 5.01. Company May Consolidate, etc., Only on Certain
----------------------------------------------
Terms. The Company shall not consolidate with or merge into any other Person or
- -----
<PAGE>
25
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, transfer 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;
(2) immediately after giving effect to such transaction, no
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.
<PAGE>
26
SECTION 5.02. Successor Substituted. Upon any consolidation of
---------------------
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 5.01, 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 6
Defaults and Remedies
---------------------
SECTION 6.01. 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 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
(2) default in the payment of the principal
of (or premium, if any, on) any Security at its
Stated 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
<PAGE>
27
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, Securities 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
$15.0 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 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
<PAGE>
28
(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 of a petition or answer or consent
seeking
<PAGE>
29
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 6.02. Acceleration of Maturity; Rescission and
----------------------------------------
Annulment. If an Event of Default (other than an Event of Default specified in
- ---------
Section 6.01(5) or 6.01(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
6.01(5) or 6.01(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 6 provided, the Holders
<PAGE>
30
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
(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 6.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
<PAGE>
31
SECTION 6.03. 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
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Stated 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 6.04. 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,
<PAGE>
32
(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;
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 7.07.
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 6.05. 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
<PAGE>
33
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 6.06. Application of Money Collected. Any money
------------------------------
collected by the Trustee pursuant to this Article 6 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:
FIRST: To the payment of all amounts due the
Trustee under Section 7.07;
SECOND: 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 6.07. 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
<PAGE>
34
(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;
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 6.08. Unconditional Right of Holders to Receive
-----------------------------------------
Principal, Premium and Interest. 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)
<PAGE>
35
and interest on such Security on the respective Stated Maturities expressed in
such Security and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
SECTION 6.09. 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 6.10. 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 2.07, 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 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 6.11. 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 6 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.
<PAGE>
36
SECTION 6.12. Control by Holders. The Holders of a majority in
------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it by such requesting Holders in its sole discretion against all
losses and expenses caused by taking or not taking such action.
SECTION 6.13. 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 9 cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
<PAGE>
37
SECTION 6.14. 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 under taking 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.
SECTION 6.15. 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 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
-----------------
has occurred and is continuing, the Trustee shall exercise 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 such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
(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
<PAGE>
38
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.12.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
<PAGE>
39
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur 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 to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) 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 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely
-----------------
on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opin ion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
<PAGE>
40
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) Except with respect to Section 4.01, the Trustee shall
have no duty to inquire as to the performance of the Issuer's covenants in
Article 4. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(1), 6.01(2) and 4.01, or (ii) any Default or Event of Default
of which the Trustee shall have received written notification or obtained actual
knowledge.
SECTION 7.03. Individual Rights of Trustee. The
-----------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Inden ture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
<PAGE>
41
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
-----------------------------
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The
---------------------------
Company shall pay to the Trustee from time to time reasonable compensation for
its services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reim burse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.
<PAGE>
42
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(5) or (6) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
----------------------
at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
<PAGE>
43
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appoint ment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust busi ness or assets to, another corporation or banking
associa tion, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
<PAGE>
44
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The
------------------------------
Trustee shall at all times satisfy the requirements of TIA ss. 310(a). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee shall
comply with TIA ss. 310(b); provided, however, that there shall be excluded from
the operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIAss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
-----------------------------------------
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
- -------
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
---------
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities;
------------------------------------
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
- ----------
Securities (other than Securities replaced pursuant to Section 2.07) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee funds suffi cient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
<PAGE>
45
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Sections 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.06, 4.07 and 4.08, and the operation of Sections 6.01(3), 6.01(4),
6.01(5) and 6.01(6) (but, in the case of Sections 6.01(5) and (6), with respect
only to Significant Subsidiaries) ("covenant defeasance option"). The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(3), 6.01(4), 6.01(5) and 6.01(6) (but, in the case of
Sections 6.01(5) and (6), with respect only to Significant Subsidiaries).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
<PAGE>
46
SECTION 8.02. Conditions to Defeasance. The Company may
------------------------
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations for
the payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the pay ments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obliga tions plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(5) or (6) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default
under any other agreement binding on the Company and is
not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
<PAGE>
47
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Security holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such cove nant defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall
--------------------------
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
<PAGE>
48
SECTION 8.04. Repayment to Company. The Trustee and the Paying
--------------------
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The
------------------------------------
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
<PAGE>
49
ARTICLE 9
---------
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Company and
--------------------------
the Trustee may amend this Indenture or the Securities without notice to or
consent of any Security holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities, or to
secure the Securities;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(6) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(7) to make any change that does not adversely
affect the rights of any Securityholder.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
<PAGE>
50
SECTION 9.02. With Consent of Holders. The Company and the
-----------------------
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any Security;
(3) reduce the principal of or extend the Stated
Maturity of any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Secur ity may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than
that stated in the Security; or
(6) make any change in Section 6.08 or 6.13 or the
second sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
<PAGE>
51
SECTION 9.03. Compliance with Trust Indenture Act. Every
-----------------------------------
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
An amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
-------------------------------------
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
<PAGE>
52
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The
---------------------------
Trustee shall sign any amendment authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
-------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Miscellaneous
-------------
SECTION 10.01. Trust Indenture Act Controls. If any provision
----------------------------
of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in this Indenture by the TIA, the required provision
shall control.
<PAGE>
53
SECTION 10.02. Notices. Any notice or communication shall be
-------
in writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
SEACOR SMIT Inc.
1370 Avenue of the Americas
25th Floor
New York, NY 10019
Fax: (212) 582-8522
Attention of Randall Blank
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Fax: (212) 310-8007
Attention of David Zeltner, Esq.
if to the Trustee:
First Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Attention of Corporate Trust Department
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears
on the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
<PAGE>
54
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions
----------------------------------------
Precedent. Upon any request or application by the Company to the Trustee to take
- ---------
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a covenant or
<PAGE>
55
condition provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such 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
(4) a statement as to whether or not, in the opin ion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. When Securities Disregarded. In
----------------------------
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar.
--------------------------------------------
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
<PAGE>
56
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a
--------------
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 10.09. Governing Law. This Indenture and the
-------------
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 10.10. No Recourse Against Others. A
---------------------------
director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such lia bility. The waiver and release shall be
part of the consi deration for the issue of the Securities.
SECTION 10.11. Successors. All agreements of the Company in
----------
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any
------------------
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.13. Table of Contents; Headings. The table of
---------------------------
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
<PAGE>
57
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
SEACOR SMIT INC.,
by /s/ Randall Blank
-----------------------
Name: Randall Blank
Title: Executive Vice President
Chief Financial Officer
and Secretary
FIRST TRUST NATIONAL
ASSOCIATION,
by /s/ Richard H. Prokosch
-----------------------
Name: Richard H. Prokosch
Title: Trust Officer
<PAGE>
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
-----------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
-----------
1.1 Definitions
-----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security
bearing the restricted securities legend set forth in Section 2.3(d) and which
is held by an IAI in accordance with Section 2.1(c).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 7.20% Senior Notes Due 2009 to
be issued pursuant to this Indenture in connection with a Registered Exchange
Offer pursuant to the Registration Agreement.
"IAI" means an institutional "accredited investor" as
described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Salomon Brothers Inc,
Bear, Stearns & Co. Inc. and Credit Suisse First Boston
Corporation.
"Initial Securities" means the 7.20% Senior Notes Due 2009,
issued under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Purchase Agreement" means the Purchase Agreement dated
September 15, 1997, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as
defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Agreement, to certain Holders of Initial
Securities, to issue and deliver to such
<PAGE>
2
Holders, in exchange for the Initial Securities, a like aggregate principal
amount of Exchange Securities registered under the Securities Act.
"Registration Agreement" means the Registration Agreement
dated as of September 22, 1997, among the Company and the Initial Purchasers.
"Securities" means the Initial Securities, the
Exchange Securities and the Private Exchange Securities,
treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company, in connection with the offer and sale of
Initial Securities or Private Exchange Securities, pursuant to the Registration
Agreement.
"Transfer Restricted Securities" means Definitive Securities
and Securities that bear or are required to bear the legend set forth in Section
2.3(d)hereto.
1.2 Other Definitions
-----------------
Defined in
Term Section:
---- ----------
"Agent Members"............................................2.1(b)
"Global Security"..........................................2.1(a)
"Regulation S".............................................2.1(a)
"Rule 144A"................................................2.1(a)
2. The Securities.
--------------
2.1 Form and Dating.
---------------
The Initial Securities are being offered and sold by the
Company pursuant to the Purchase Agreement. The Initial Securities will be
resold, initially only to QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A"), and in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to,
<PAGE>
3
among others, QIBs, purchasers in reliance on Regulation S and
IAIs.
(a) Global Securities. Initial Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form without interest coupons with the global securities legend
and restricted securities legend set forth in Exhibit 1 hereto (each, a "Global
Security"), which shall be deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Trustee, at its New York office, as
custodian for the Depository (or with such other custodian as the Depository may
direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order from the Company, authenticate
and deliver initially one or more Global Securities that (a) shall be registered
in the name of the Depository for such Global Security or Global Securities or
the nominee of such Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or held by the Trustee
as custodian for the Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
Securities Custodian or under such Global Security, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, 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 Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
<PAGE>
4
(c) Certificated Securities. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
Initial Securities for original issue in an aggregate principal amount of
$150,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Agreement, for a like principal amount of Initial
Securities, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities or Private Exchange Securities. The aggregate principal
amount of Securities outstanding at any time may not exceed $150,000,000 except
as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange
---------------------
of Definitive Securities. When Definitive Securities are
presented to the Registrar or a co-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 Registrar or co-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 Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act, pursuant to
Section 2.3(b) or pursuant to clause
<PAGE>
5
(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 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 on the reverse of
the Security); or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect (in
the form set forth on the reverse of the Security); or
(C) if such Definitive Securities are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144; or (x) in reliance on another
exemption from the registration requirements of the Securities
Act: (i) a certification to that effect (in the form set forth
on the reverse of the Security) and (ii) if the Company or
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
2.3(d)(i).
(b) 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
QIB in accordance with Rule 144A, (B) to an IAI that has furnished to
the Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee)
or (C) outside the United States in an offshore transaction within the
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 Custodian to make, an adjustment on its books and
records with respect to such
<PAGE>
6
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 Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, 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 canceled. 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) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in the Global Security and
such account shall be credited in accordance with such instructions with a
beneficial interest in the Global Security and the account of the Person making
the transfer shall be debited by an amount equal to the beneficial interest in
the Global Security being transferred. In the case of a transfer of a beneficial
interest in a Global Security to an IAI, the transferee must furnish a signed
letter to the Trustee containing certain representations and agreements (the
form of which letter can be obtained from the Trustee).
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on
<PAGE>
7
its books and records the date and a corresponding decrease in the
principal amount of Global Security from which such interest is being
transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred except as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iv) In the event that a Global Security or any portion
thereof is exchanged for Securities in definitive registered form
pursuant to Section 2.4 or Section 2.09 of the Indenture, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF
THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y)
BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER,
IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE
SELLER
<PAGE>
8
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4)
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A LETTER WHICH MAY BE OBTAINED FROM THE
COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE
COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF
RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following
additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
<PAGE>
9
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to
Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security
for a Definitive Security that does not bear the legend set
forth above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
that is represented by a Global Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security, in either case,
if the Holder certifies in writing to the Registrar that its request
for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such
Initial Security or such Private Exchange Security issued to certain
Holders be issued in global form will cease to apply, and a
certificated or global Initial Security or Private Exchange Security
without legends will be available to the transferee of the Holder of
such Initial Securities or Private Exchange Securities upon exchange of
such transferring Holder's certificated Initial Security or Private
Exchange Security or directions to transfer such Holder's interest in
the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange
Offer with respect to the Initial Securities pursuant to
<PAGE>
10
which Holders of such Initial Securities are offered Exchange
Securities in exchange for their Initial Securities, all requirements
pertaining to such Initial Securities that Initial Securities issued to
certain Holders be issued in global form will cease to apply and
certificated Initial Securities with the restricted securities legend
set forth in Exhibit 1 hereto will be available to Holders of such
Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form will be available to
Holders that exchange such Initial Securities in such Registered
Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply, and Private Exchange Securities in
global form with the Restricted Securities Legend set forth in Exhibit
1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(vi) After the expiration of the "40-day restricted period"
(within the meaning of Rule 903(c)(3) of Regulation S), upon a sale or
transfer of any Initial Security acquired pursuant to Regulation S, all
requirements pertaining to legends on such Initial Security will cease
to apply, the requirements requiring any such Initial Security be
issued in global form will cease to apply, and an Initial Security in
certificated or global form without the Restricted Security Legend will
be available to the transferee of the Holder of such Initial
Securities.
(e) Cancelation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancelation or retained
and canceled by the Trustee. At any time prior to such cancelation, if any
beneficial interest in a Global Security is exchanged for certificated or
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
<PAGE>
11
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and
Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities, Definitive Securities and Global Securities at the
Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06 and 9.05).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated or
Definitive Security selected for redemption in whole or in part
pursuant to Article 3 of this Indenture, except the unredeemed portion
of any certificated or Definitive Security being redeemed in part, or
(b) any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Securities or
15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
<PAGE>
12
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Certificated Securities.
-----------------------
(a) A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
<PAGE>
13
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount of
certificated Initial Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(d), bear the
restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
<PAGE>
14
EXHIBIT 1 to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG
AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
<PAGE>
15
THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A LETTER WHICH MAY BE OBTAINED
FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY
AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT."
[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.]
<PAGE>
16
No. $[150,000,000]
CUSIP No.:
ISIN:
7.20% Senior Notes Due 2009
SEACOR SMIT INC., a Delaware corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum set forth in the Schedule
of Increases and Decreases in Global Security on September 15, 2009.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
<PAGE>
17
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: September 22, 1997
SEACOR SMIT INC.,
by
-----------------------
President
-----------------------
Secretary
Dated: September 22, 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee, certifies that this
is one of the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
<PAGE>
18
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
7.20% Senior Note Due 2009
1. Interest
(a) SEACOR SMIT INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration
Agreement) occurs, interest will accrue on this Security at a rate of 0.25% per
annum from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured. The Company will pay interest semiannually on March 15 and September 15
of each year. Interest on the Securities will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from September
22, 1997. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Special Interest. The holder of this Security is entitled
to the benefits of a Registration Agreement, dated as of September 15, 1997,
among the Company and the Purchasers named therein (the "Registration
Agreement"). Capitalized terms used in this paragraph (b) but not defined herein
have the meanings assigned to them in the Registration Agreement. In the event
that (i) by the 150th day following the Issue Date, the Exchange Offer
Registration Statement is not filed with the Commission, (ii) by the 180th day
following the Issue Date, neither the Exchange Offer Registration Statement is
declared effective nor (if the Exchange Offer is not permitted as described
above) the Shelf Registration Statement is filed with the Commission, or (iii)
by the 210th day following the Issue Date, the Exchange Offer is not consummated
or the Shelf Registration Statement is not declared effective with respect
thereto (each such event referred to in clauses (i) through (iii), a
"Registration Default"), interest will accrue on the applicable Notes (in
addition to stated interest on such Notes) which, except as provided below,
shall be the sole and exclusive remedy for such Registration Default from and
<PAGE>
19
including the next day following each such Registration Default. In each case
such additional interest (the "Special Interest") will be payable in cash
semiannually in arrears each March 15 and September 15, at a rate per annum
equal to 0.25% of the principal amount of such Notes for each such Registration
Default. The aggregate amount of Special Interest payable pursuant to the above
provisions will in no event exceed 0.25% per annum of the principal amount of
such Notes which, except as provided below, shall be the sole and exclusive
remedy for such Registration Default. Upon (a) the filing of the Exchange Offer
Registration Statement after the 150-day period described in clause (i) above,
(b) the effectiveness of the Exchange Offer Registration Statement or the filing
of the Shelf Registration Statement after the 180-day period described in
clause (ii) above or (c) the consummation of the Exchange Offer for such Notes
or the effectiveness of a Shelf Registration Statement, as the case may be,
after the 210-day period described in clause (iii) above, the Special Interest
payable on such Notes as a result of the applicable Registration Default will
cease to accrue. For purposes of the preceding sentence, the curing of a
Registration Default by the means described in clause (b) above shall constitute
a cure of the Registration Defaults described in clauses (i) and (ii) above, and
the curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above. The Company will have no other liabilities for monetary
damages with respect to the above; provided, however, that in the event the
Company breaches, fails to comply with or violates certain provisions of the
Registration Agreement, the holders shall be entitled to, and the Company shall
not oppose the granting of, equitable relief, including injunction and specific
performance.
In the event that a Shelf Registration Statement is declared
effective pursuant to the paragraph preceding the immediately preceding
paragraph, if the Company fails to keep such Registration Statement continuously
effective for the period required by the Registration Agreement (except as
specifically permitted therein), then from such time as the Shelf Registration
Statement is no longer effective until the earlier of (i) the date that the
Shelf Registration Statement is again deemed effective and (ii) the date that is
the earliest of (x) the second anniversary of the Issue Date (or until the first
anniversary of the effective date if the Shelf Registration Statement is filed
at the request of the Initial Purchasers), (y) the time when the Notes
registered thereunder can be sold by non-affiliates pursuant to Rule 144 under
the Securities Act without any limitation under classes (c), (e), (f) and (h) of
Rule 144, or (z) the date as of which all such
<PAGE>
20
Notes are sold pursuant to the Shelf Registration Statement, Special Interest
shall accrue at a rate per annum equal to 0.25% of the principal amount of the
Notes which, except as provided below, shall be the sole and exclusive remedy
for such Registration Default and shall be payable in cash semiannually in
arrears each March 15 and September 15. The Company will have no other
liabilities for monetary damages with respect to the above; provided, however,
that in the event the Company breaches, fails to comply with or violates certain
provisions of the Registration Agreement, the holders shall be entitled to, and
the Company shall not oppose the granting of, equitable relief, including
injunction and specific performance.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, First Trust National Association, a
national banking association ("Trustee"), will act as Paying
Agent and Registrar. The Company may appoint and change any
<PAGE>
21
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of September 22, 1997 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the
Company limited to $150,000,000 aggregate principal amount (subject to Section
2.07 of the Indenture).
The Company will not, and will not permit any of its
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any Principal Property or any shares of
stock or indebtedness of any Subsidiary that owns or leases any Principal
Property (whether such Principal Property, shares of stock or indebtedness are
now owned or hereafter acquired) unless all payments due under the Indenture and
the Notes are secured on an equal and ratable basis with the obligations so
secured until such time as such obligation is no longer secured by a Lien,
except for Permitted Liens.
The Company nor any Subsidiary will not enter into any Sale
and Leaseback Transaction with respect to any Principal Property unless either
(a) the Company or such Subsidiary would be entitled, pursuant to the provisions
of the Indenture, to incur Indebtedness secured by a Lien on the property to be
leased without equally and ratably securing the Notes or (b) the Company, within
180 days after the effective date of such transaction, applies to the voluntary
retirement of its funded debt an amount equal to the value of such transaction,
defined as the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value, in the opinion of the Board of Directors, of
the leased property at the time such transaction was entered into.
<PAGE>
22
Notwithstanding the foregoing limitations on Liens and Sale and
Leaseback Transaction, the Company and its Subsidiaries may issue, assume, or
guarantee Indebtedness secured by a Lien without securing the Notes, or may
enter into Sale and Leaseback Transactions without retiring funded debt, or
enter into a combination of such transactions, if the sum of the principal
amount of all such Indebtedness and the aggregate value of all such Sale and
Leaseback Transactions does not at any time exceed 15% of the Consolidated Net
Tangible Assets of the Company and its consolidated Subsidiaries as shown in the
audited consolidated balance sheet contained in the latest annual report to the
shareholders of the Company.
5. Optional Redemption
The Securities will be redeemable at any time, at the option
of the Company, in whole or from time to time in part, upon not less than 30 and
not more than 60 days' notice mailed to each Holder to be redeemed at the
Holder's address appearing in the books of the Registrar, on any date prior to
maturity (the "Redemption Date") at a price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on an interest payment date that is on or prior to the Redemption Date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the
Securities plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any
Security (or portion thereof) to be redeemed will be equal to the excess, if
any, of:
(1) the sum of the present values, calculated as of
the Redemption Date, of:
(a) each interest payment that, but for such
redemption, would have been payable on the Security
(or portion thereof) being redeemed on each interest
payment date occurring after the Redemption Date
(excluding any accrued interest for the period prior
to the Redemption Date); and
(b) The principal amount that, but for such
redemption, would have been payable at the final
maturity of the Security (or portion thereof) being
redeemed;
<PAGE>
23
over
(2) the principal amount of the Security (or portion
thereof) being redeemed.
The present values of interest and principal payments referred
to in clause (i) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield (as defined
below) plus 20 basis points.
The Make-Whole Premium will be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, that if the Company fails to make such appointment at least 45
business days prior to the Redemption Date, or if the institution so appointed
is unwilling or unable to make such calculation, such calculation will be made
by Salomon Brothers Inc or, if such firm is unwilling or unable to make such
calculation, by an independent investment banking institution of national
standing appointed by the Trustee (in any such case, an "Independent Investment
Banker").
For purposes of determining the Make-Whole Premium, "Treasury
Yield" means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Securities, calculated to
the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield will be
determined as of the third business day immediately preceding the applicable
Redemption Date.
The weekly average yields of United States Treasury Notes will
be determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States Treasury
Notes having a constant maturity that is the same as the Remaining Term, then
the Treasury Yield will be equal to such weekly average yield. In all other
cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields on the United States
Treasury Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term [and the
<PAGE>
24
United States Treasury Notes that have a constant maturity closest to and less
than the Remaining Term] (in each case as set forth in the H.15 Statistical
Release). Any weekly average yields so calculated by interpolation will be
rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above
being rounded upward. If weekly average yields for United States Treasury Notes
are not available in the H.15 Statistical Release or otherwise, then the
Treasury Yield will be calculated by interpolation of comparable rates selected
by the Independent Investment Banker.
In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate, although no Security of $1,000 in original principal
amount or less shall be redeemed in part. If any Security is to be redeemed in
part only, the notice of redemption relating to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancelation of the original Security.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities
<PAGE>
25
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities or to secure the Securities,
or to add additional covenants or surrender rights and powers conferred on the
Company, or to comply with any
<PAGE>
26
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies
Under the Indenture, Events of Default include a (i) default
in the payment of any interest upon any of the Securities for 30 days or more
after such payment is due; (ii) default in the payment of the principal of and
premium, if any, on any of the Securities when due; (iii) default by the Company
in the performance, or breach, of any of its other covenants in the Indenture
which will not have been remedied by the end of a period of 60 days after
written notice 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; (iv) failure to pay when due the principal of, or acceleration of,
any indebtedness for money borrowed by the Company or a Subsidiary in excess of
$15.0 million principal amount, if such indebtedness is not discharged, or such
acceleration is not annulled, by the end of a period of 10 days after written
notice 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; and
(v) certain events of bankruptcy, insolvency or reorganization of the Company or
a Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities may declare
all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders.
<PAGE>
27
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
17. Holders' Compliance with Registration Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
<PAGE>
28
18. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
SEACOR SMIT Inc.
1370 Avenue of the Americas
25th Floor
New York, NY 10019
Attention of Secretary : -------------------
<PAGE>
29
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent
may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: ________________ Your Signature: _______________________
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement
under the Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933) that
purchases for its own account or for the
account of a qualified institutional buyer to
whom notice is given that such transfer is
being made in reliance on Rule 144A, in each
<PAGE>
30
case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(4) [ ] inside the United States to an institutional
"accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act of 1933) that, prior
to such transfer, furnishes to the Trustee a
signed letter containing certain
representations and agreements (the form of
which letter can be obtained from the Trustee);
or
(5) [ ] outside the United States in an offshore
transaction within the meaning of Regulation S under
the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
(6) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
-------------------------------
Signature
Signature Guarantee:
- ----------------------------- -------------------------------
(Signature must be guaranteed)
Signature ----------------------------------------------------------------------
<PAGE>
31
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ _______________________________
NOTICE: To be executed by an
executive officer
<PAGE>
32
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or Securities Custodian
increase)
- --------------- ----------------- ------------------ ------------------ ------------------
</TABLE>
<PAGE>
33
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY
*/
**/
No.: $
CUSIP No.:
ISIN No.:
7.20% Senior Notes Due 2009
SEACOR SMIT INC., a Delaware corporation, promises to pay to , or
registered assigns, the principal sum of Dollars on September 15, 2009.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the other side of this
Security.
Dated: September 22, 1997
SEACOR SMIT INC.,
by
___________________________
President
[CORPORATE SEAL] ___________________________
Secretary
Dated: September 22, 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
First Trust National Association,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
<PAGE>
34
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
**/ [If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]
<PAGE>
35
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
7.20% Senior Note Due 2009
1. Interest
SEACOR SMIT INC., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above [; provided, however,
that if a Registration Default (as defined in the Registration Rights Agreement)
occurs, interest will accrue on this Security at a rate of 0.25% per annum from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured] ***/. The
Company will pay interest semiannually on March 15 and September 15 of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from [September 22,
1997]. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
- ---------------
***/ Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Rights Agreement.
<PAGE>
36
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no U.S. dollar account maintained by the payee with a bank in the United
States is designated by any holder to the Trustee or the Paying Agent at least
30 days prior to the relevant due date for payment (or such other date as the
Trustee may accept in its discretion), by mailing a check to the registered
address of such holder.
3. Paying Agent and Registrar
Initially, First Trust National Association, a national
banking association corporation ("Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of September 22, 1997 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the
Company limited to $150,000,000 aggregate principal amount (subject to Section
2.07 of the Indenture).
The Company will not, and will not permit any of its
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any Principal Property or any shares of
stock or indebtedness of any Subsidiary that owns or
<PAGE>
37
leases any Principal Property (whether such Principal Property, shares of stock
or indebtedness are now owned or hereafter acquired) unless all payments due
under the Indenture and the Notes are secured on an equal and ratable basis with
the obligations so secured until such time as such obligation is no longer
secured by a Lien, except for Permitted Liens.
The Company nor any Subsidiary will not enter into any Sale
and Leaseback Transaction with respect to any Principal Property unless either
(a) the Company or such Subsidiary would be entitled, pursuant to the provisions
of the Indenture, to incur Indebtedness secured by a Lien on the property to be
leased without equally and ratably securing the Notes or (b) the Company, within
180 days after the effective date of such transaction, applies to the voluntary
retirement of its funded debt an amount equal to the value of such transaction,
defined as the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value, in the opinion of the Board of Directors, of
the leased property at the time such transaction was entered into.
Notwithstanding the foregoing limitations on Liens and Sale and
Leaseback Transaction, the Company and its Subsidiaries may issue, assume, or
guarantee Indebtedness secured by a Lien without securing the Notes, or may
enter into Sale and Leaseback Transactions without retiring funded debt, or
enter into a combination of such transactions, if the sum of the principal
amount of all such Indebtedness and the aggregate value of all such Sale and
Leaseback Transactions does not at any time exceed 15% of the Consolidated Net
Tangible Assets of the Company and its consolidated Subsidiaries as shown in the
audited consolidated balance sheet contained in the latest annual report to the
shareholders of the Company.
5. Optional Redemption
The Securities will be redeemable at any time, at the option
of the Company, in whole or from time to time in part, upon not less than 30 and
not more than 60 days' notice mailed to each Holder to be redeemed at the
Holder's address appearing in the books of the Registrar, on any date prior to
maturity (the "Redemption Date") at a price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on an interest payment date that is on or prior to the Redemption Date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the
Securities plus accrued interest to the Redemption Date.
<PAGE>
38
The amount of the Make-Whole Premium with respect to any
Security (or portion thereof) to be redeemed will be equal to the excess, if
any, of:
(1) the sum of the present values, calculated as of the
Redemption Date, of:
(a) each interest payment that, but for such
redemption, would have been payable on the Security
(or portion thereof) being redeemed on each interest
payment date occurring after the Redemption Date
(excluding any accrued interest for the period prior
to the Redemption Date); and
(b) the principal amount that, but for such
redemption, would have been payable at the final
maturity of the Security (or portion thereof) being
redeemed;
over
(2) the principal amount of the Security (or portion thereof)
being redeemed. The present values of interest and principal
payments referred to in clause (i) above will be determined in
accordance with generally accepted principles of financial
analysis. Such present values will be calculated by
discounting the amount of each payment of interest or
principal from the date that each such payment would have been
payable, but for the redemption, to the Redemption Date at a
discount rate equal to the Treasury Yield (as defined below)
plus 20 basis points.
The Make-Whole Premium will be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, that if the Company fails to make such appointment at least 45
business days prior to the Redemption Date, or if the institution so appointed
is unwilling or unable to make such calculation, such calculation will be made
by Salomon Brothers Inc or, if such firm is unwilling or unable to make such
calculation, by an independent investment banking institution of national
standing appointed by the Trustee (in any such case, an "Independent Investment
Banker").
For purposes of determining the Make-Whole Premium, "Treasury
Yield" means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Securities, calculated to
the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield will
<PAGE>
39
be determined as of the third business day immediately preceding
the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will
be determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States Treasury
Notes having a constant maturity that is the same as the Remaining Term, then
the Treasury Yield will be equal to such weekly average yield. In all other
cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields on the United States
Treasury Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term and the United States
Treasury Notes that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15 Statistical Release). Any
weekly average yields so calculated by interpolation will be rounded to the
nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded
upward. If weekly average yields for United States Treasury Notes are not
available in the H.15 Statistical Release or otherwise, then the Treasury Yield
will be calculated by interpolation of comparable rates selected by the
Independent Investment Banker.
In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate, although no Security of $1,000 in original principal
amount or less shall be redeemed in part. If any Security is to be redeemed in
part only, the notice of redemption relating to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancelation of the original Security.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date
<PAGE>
40
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company
<PAGE>
41
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
12. Defaults and Remedies
Under the Indenture, Events of Default include a (i) default
in the payment of any interest upon any of the Securities for 30 days or more
after such payment is due; (ii) default in the payment of the principal of and
premium, if any, on any of the Securities when due; (iii) default by the Company
in the performance, or breach, of any of its other covenants in the Indenture
which will not have been remedied by the end of a period of 60 days after
written notice 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; (iv) failure to pay when due the principal of, or acceleration of,
any indebtedness for money borrowed by the Company or a Subsidiary in excess of
$15.0 million principal amount, if such indebtedness is not discharged, or such
acceleration is not annulled, by the end of a period of 10 days after written
notice 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; and
(v) certain events of bankruptcy, insolvency or reorganization of the Company or
a Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities may declare
all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders.
<PAGE>
42
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
[17. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.] 1/
18. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
- --------
1. For Exchange or Private Exchange Securities only.
<PAGE>
43
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
SEACOR SMIT Inc.
1370 Avenue of the Americas
25th Floor
New York, NY 10019
Attention of Secretary: ----------------------
<PAGE>
44
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: ________________ Your Signature: _________________________________________
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
<PAGE>
EXHIBIT 4.2
EXECUTION COPY
$150,000,000
SEACOR SMIT INC.
7.20% SENIOR DEBENTURES DUE 2009
PURCHASE AGREEMENT
New York, New York
September 15, 1997
Salomon Brothers Inc
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
SEACOR SMIT Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule I hereto (the
"Purchasers"), $150,000,000 aggregate principal amount of 7.20% Senior Notes Due
September 15, 2009 of the Company (the "Securities") in the amounts as set forth
on Schedule I hereto to be issued under an Indenture dated as of September 22,
1997 (the "Indenture"), between the Company and First Trust National
Association, as Trustee.
The sale of the Securities to the Purchasers will
be made without registration of the Securities under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Purchasers will make an offering of the Securities purchased by them
hereunder in accordance with Section 4 hereof on the terms set forth in the
Offering Memorandum (as defined below), as soon as you deem advisable after this
Agreement has been executed and delivered.
In connection with the sale of the Securities, the
Company has prepared a preliminary offering memorandum, dated September 5, 1997
(the "Preliminary Memorandum"), and a final offering memorandum, dated September
15, 1997 (the "Offering Memorandum"). Each of the Preliminary Memorandum and the
Offering Memorandum sets forth certain information
<PAGE>
2
concerning the Company and the Securities. The Company hereby confirms that it
has authorized the use of the Preliminary Memorandum and the Offering Memorandum
in connection with the offering and resale by the Purchasers of the Securities.
Any references herein to the Preliminary Memorandum or the Offering Memorandum
shall be deemed to include all exhibits thereto and all documents incorporated
by reference therein which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Execution Time (as defined
below); and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Offering Memorandum shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Execution Time which is incorporated by reference therein.
Holders (including subsequent transferees) of the
Securities will have the registration rights set forth in the Registration
Agreement dated as of the Closing Date (the "Registration Agreement") to be
entered into between the Company and the Purchasers. Pursuant to the
Registration Agreement, the Company has agreed to file with the Securities and
Exchange Commission (the "Commission") an exchange offer registration statement
or a shelf registration statement (each, a "Registration Statement") pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), to register
sales, or resales, of the Securities following the sale of the Securities
contemplated hereby. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
1. Representations and Warranties. (a) The
------------------------------
Company represents and warrants to, and agrees with, each Purchaser as set forth
below in this Section 1(a):
(i) The Preliminary Offering Memorandum and the
Offering Memorandum and any amendments or supplements
thereto did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from
the Offering Memorandum, based upon written information
furnished to the Company by any Purchaser specifically for
use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b)
hereof. The
<PAGE>
3
Company's Annual Report on Form 10-K most recently filed
with the Commission and all subsequent reports, on the
respective dates filed by the Company (collectively, the
"Exchange Act Reports"), which have been filed by the
Company with the Commission or sent to stockholders
pursuant to the Exchange Act do not 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. Such documents, when they were filed with the
Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(ii) Assuming the accuracy of the representations
and warranties of the Purchasers and the compliance by the
Purchasers with the covenants set forth in Section 1(b)
hereof, the offer and sale of the Securities in the manner
contemplated by this Agreement will be exempt from the
registration requirements of the Securities Act by reason
of Section 4(2) thereof, Rule 144A thereunder and
Regulation S ("Regulation S") under the Securities Act
thereunder, and it is not necessary to qualify an indenture
in respect of the Securities under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture
Act"), except as contemplated by the Registration
Agreement.
(iii) When the Securities are issued and
delivered pursuant to this Agreement, no securities of the
same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as the Securities are listed on any
national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated interdealer
quotation system.
(iv) Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf
(i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S.
person (as such terms are defined in Regulation S under the
Securities Act) the Securities or any security of the same
class or series as the Securities or (ii) has offered or
will offer or sell the Securities
<PAGE>
4
(A) in the United States by means of any form of general
solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or (B) with respect to
any such securities sold in reliance on Rule 903 of
Regulation S, by means of any directed selling efforts
within the meaning of Rule 902(b) of Regulation S. Assuming
the accuracy of the representations and warranties of the
Purchasers and the compliance by the Purchasers with the
covenants set forth in Section 1(b) hereof, the Company,
its affiliates and any person acting on its or their behalf
have complied and will comply with the offering
restrictions requirement of Regulation S. The Company has
not entered and will not enter into any contractual
arrangement with respect to the distribution of the
Securities except for this Agreement.
(v) The Company is not an open-end investment
company, unit investment trust or face-amount certificate
company that is or is required to be registered under
Section 8 of the United States Investment Company Act of
1940 (the "Investment Company Act"), nor is it a closed end
investment company required to be registered, but not
registered thereunder; and the Company is not and, after
giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in
the Offering Memorandum, will not be an "investment
company" as defined in the Investment Company Act.
(vi) The Company is subject to the reporting
requirements of Section 13 or 15(d) under the Exchange Act.
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
(viii) No consent, approval, authorization, or
order of, or filing with, any governmental agency or body
or any court is required for the consummation of the
transactions contemplated by this Agreement and the
Registration Agreement in connection with the issuance and
sale of the Securities by the Company, except in connection
with the registration of the Securities and the
qualification of the Indenture pursuant to the Registration
Agreement, and except as to state or foreign securities
laws.
<PAGE>
5
(ix) The Indenture has been duly authorized; and
when the Securities are delivered and paid for pursuant to
this Agreement on the Closing Date (as defined below), will
have been duly executed and delivered; the Securities have
been duly authorized; such Securities will have been duly
executed, authenticated, issued and delivered and will
conform to the description thereof contained in the
Offering Memorandum and the Indenture and such Securities
will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights
and to general equity principles.
(x) Neither the Company nor any of its sub-
sidiaries has sustained since the date of the latest
audited financial statements included in the Offering
Memorandum any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering
Memorandum; and, since the respective dates as of which
information is given in the Offering Memorandum, there has
not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective
material adverse change, in or affecting the general
affairs, management, financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Offering Memorandum.
(xi) The Company and its subsidiaries have good
title to all real and personal property owned by them free
and clear of all liens, encumbrances and defects other than
liens in respect of crews' wages, salaries, general
average, demurrage, claims arising under maritime torts and
maritime contract liens and except such as are described in
the Offering Memorandum or such as do not materially affect
the value of such property and do not interfere with the
use made and proposed to
<PAGE>
6
be made of such property by the Company and its
subsidiaries; any real property and buildings held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting leases enforceable against them
with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
since entering into the DnB Facility (as defined in the
Offering Memorandum) on June 30, 1997, neither the Company
nor any of its subsidiaries has granted or conveyed any
mortgage or any other security interest with respect to any
of its vessels; and since June 30, 1997, the only vessels
the Company has sold are the SAN JOSE ISLAND and the EMMA
McCALL II.
(xii) The Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Offering Memorandum, and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, except where the failure to be so qualified
would not have a material adverse effect on the general
affairs, prospects, management, financial position,
stockholders' equity or result of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse
Effect"); and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation.
(xiii) The Company has an authorized capital-
ization as set forth under the heading "Capitalization" in
the Offering Memorandum, and all of the outstanding shares
of capital stock of the Company have been validly
authorized and issued, are fully paid and nonassessable and
conform to the description of the capital stock of the
Company incorporated by reference in the Offering
Memorandum; and all of the outstanding shares of capital
stock of each subsidiary of the Company have been validly
authorized and issued, are fully paid and nonassessable and
(except for directors'
<PAGE>
7
qualifying shares and except as set forth in the Offering
Memorandum) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances,
equities or claims.
(xiv) The Registration Agreement has been duly
authorized by the Company and, when executed and delivered,
will conform in all material respects to the description
thereof contained in the Offering Memorandum. The
Registration Agreement when validly executed and delivered
by the Company will constitute a valid and legally binding
obligation of the Company and will be enforceable against
it in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles and except as the
right to indemnity and contribution under the Registration
Agreement may be limited by state or federal securities
laws or the public policy underlying such laws.
(xv) The execution, delivery and performance of
the Indenture, this Agreement, the Registration Agreement
and the issuance and sale of Securities and compliance with
the terms and provisions thereof will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement,
stockholders' agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or
by which the Company or any its subsidiaries is bound or to
which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Restated
Certificate of Incorporation or Amended By-laws of the
Company or any statute or any order, rule or regulation of
any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties; and no consent, approval,
authorization, order, registration or qualification of or
with any such court or governmental agency or body is
required for the issuance and sale of the Securities or the
consummation by the Company of the transactions
contemplated by this Agreement, except such consents,
approvals,
<PAGE>
8
authorizations, registrations or qualifications as may be
required (i) under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Securities by the Purchasers and (ii) in connection with
the registration of the Securities and the qualification of
the Indenture pursuant to the Registration Agreement.
(xvi) Other than as set forth in the Offering
Memorandum, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse
Effect; and, to the best of the Company's knowledge, no
such proceedings are threatened by governmental authorities
or threatened by others.
(xvii) The Company is a citizen of the United
States within the meaning of Section 2 of the Shipping Act
of 1916, as amended (the "Shipping Act") and is qualified
to engage in the coastwise trade of the United States; the
issue and sale of the Securities by the Company and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
herein contemplated will not cause the Company to cease to
be a citizen of the United States within the meaning of
Section 2 of the Shipping Act or cause the Company to cease
to be qualified to engage in the coastwise trade of the
United States.
(xviii) The Company and its subsidiaries hold all
licenses, consents and approvals required by, and are in
compliance with, all regulations of state, Federal and
foreign governmental authorities that regulate the conduct
of the business of the Company and its subsidiaries, except
where the failure to hold any such license, consent or
approval or to be in compliance with any such regulation
would not have a Material Adverse Effect.
(xix) National Response Corporation ("NRC") has
been designated an Oil Spill Removal Organization by the
U.S. Coast Guard pursuant to the Oil Pollution Act of 1990.
<PAGE>
9
(xx) Except as disclosed in the Offering
Memorandum, there are no contracts, agreements or
understandings between the Company and any person relating
to the offering of the Securities that would give rise to a
valid claim against the Company or any Purchaser for a
brokerage commission, finder's fee or other like payment.
(b) Each Purchaser severally represents and warrants to,
and agrees with the Company as set forth below in this Section 1(b)
(terms used in this Section 1(b) that are defined in Rule 144A or
Regulation S under the Securities Act are used herein as defined
therein).
(i) Each Purchaser severally represents and
warrants to the Company that it is an "accredited investor"
within the meaning of Regulation D under the Securities
Act.
(ii) Each Purchaser severally acknowledges that
the Securities have not been registered under the
Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons, except in accordance with Regulation S or pursuant
to Rule 144A under the Securities Act. Each Purchaser
severally represents and agrees that it has offered and
sold the Securities, and will offer and sell the Securities
(A) as part of its distribution at any time and (B)
otherwise, until 40 days after the later of the
commencement of the sale of the offering and the latest
Closing Date, only in accordance with Rule 903 or Rule 144A
under the Securities Act ("Rule 144A"). Accordingly,
neither such Purchaser nor its affiliates, nor any persons
acting on its or their behalf, have engaged or will engage
in any directed selling efforts with respect to the
Securities and such Purchaser, its affiliates and all
persons acting on its or their behalf have complied and
will comply with the offering restrictions requirement of
Regulation S. Each Purchaser severally agrees that, at or
prior to confirmation of sale of the Securities, other than
a sale pursuant to Rule 144A, such Purchaser will have sent
to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases the
Securities from it during the restricted period a
confirmation or notice to substantially the following
effect:
<PAGE>
10
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933
(the "Securities Act") and may not be offered or
sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii)
otherwise, until 40 days after the later of the
date of the commencement of the offering and the
closing date, except in either case in accordance
with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have
the meanings given to them by Regulation S."
(iii) Each Purchaser severally agrees that it and
each of its affiliates has not entered and will not enter
into any contractual arrangement with respect to the
distribution of the Securities except for any such
arrangements with the other Purchasers or affiliates of the
other Purchasers or with the prior written consent of the
Company.
(iv) Each Purchaser severally agrees that it and
each of its affiliates will not offer or sell the
Securities in the United States by means of any form of
general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act, including,
but not limited to (i) any advertisement, article, notice
or other communication published in any newspaper,
magazine, or similar media or broadcast over television or
radio, or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect
to resales made in reliance on Rule 144A of any of the
Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale
notice to the effect that the resale of such Securities has
been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by
Rule 144A.
(v) Each of the Purchasers severally represents
and agrees that (i) it has not offered or sold and prior to
the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons
in the United Kingdom except to persons whose ordinary
<PAGE>
11
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has
complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything
done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has
only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in
connection with the issue of the Securities to a person who
is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
2. Purchase and Sale. Subject to the terms and conditions
-----------------
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Purchaser, and each Purchaser agrees, severally
and not jointly, to purchase from the Company, at a purchase price of 99.20% of
the principal amount thereof, plus accrued interest from September 22, 1997 to
the Closing Date (as hereinafter defined), the respective principal amounts of
the Securities set forth opposite such Purchaser's name in Schedule I hereto.
3. Delivery and Payment. The Company will
--------------------
deliver against payment of the purchase price the Securities in the form of one
or more permanent global Securities in definitive form (the "Global Securities")
deposited with the Trustee as custodian for The Depository Trust Company ("DTC")
and registered in the name of Cede & Co., as nominee for DTC. Interests in any
permanent global Securities will be held only in book-entry form through DTC,
except in the limited circumstances described in the Offering Memorandum.
Payment for the Securities shall be made by the Purchasers in Federal (same day)
funds by wire transfer to an account previously designated to Salomon Brothers
Inc by the Company at a bank acceptable to Salomon Brothers Inc drawn to the
order of such payee as designated by the Company in writing to the Purchasers at
the office of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
York, New York 10019 at 9:30 A.M. (New York time), on September 22, 1997, or at
such other time not later than seven full business days
<PAGE>
12
thereafter, as Salomon Brothers Inc and the Company determine, such time being
herein referred to as the "Closing Date", against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Securities.
The Global Securities will be made available for checking at the above office of
Cravath, Swaine & Moore at least 24 hours prior to the Closing Date.
The Company agrees to have the Securities
available for inspection, checking and packaging by the Purchasers in New York,
New York, not later than 1:00 p.m. on the business day prior to the Closing
Date.
4. Agreements.
----------
(a) The Company agrees with the several
Purchasers that:
(i) The Company will advise Salomon Brothers Inc
promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or
supplementation without Salomon Brothers Inc's consent, if,
at any time prior to the completion of the resale of the
Securities by the Purchasers, any event occurs as a result
of which the Offering Memorandum as then amended or
supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading, or if it is necessary at any such time to amend
or supplement the Offering Memorandum to comply with any
applicable law, the Company promptly will notify Salomon
Brothers Inc of such event and promptly will prepare, at
its own expense, an amendment or supplement which will
correct such statement or omission or effect such
compliance. Neither Salomon Brothers Inc's consent to, nor
the Purchasers' delivery to offerees or investors of, any
such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 5.
(ii) During the period that the Securities are
outstanding, the Company will furnish to Salomon Brothers
Inc and upon request, to each of the other Purchasers, as
soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year;
and the Company will furnish to Salomon Brothers Inc and,
<PAGE>
13
upon request, to each of the other Purchasers as soon as
available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under
the Exchange Act or mailed to shareholders.
(iii) The Company will furnish to Salomon
Brothers Inc copies of the Preliminary Offering Memorandum,
the Offering Memorandum and all amendments and supplements
to such documents, in each case as soon as available and in
such quantities as Salomon Brothers Inc reasonably
requests, and the Company will furnish to Salomon Brothers
Inc promptly after the date hereof four copies of the
Offering Memorandum signed by a duly authorized officer of
the Company. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company will
promptly furnish or cause to be furnished to Salomon
Brothers Inc (and, upon request, to each of the other
Purchasers) and, upon request of holders and prospective
purchasers of the Securities, to such holders and
purchasers, copies of the information required to be
delivered to holders and prospective purchasers of the
Securities pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provisions thereto) in order to
permit compliance with Rule 144A in connection with resales
by such holders of the Securities. The Company will pay the
expenses of printing and distributing to the Purchaser(s)
all such documents.
(iv) The Company will arrange for the
qualification of the Securities for sale and the
determination of their eligibility for investment under the
laws of such jurisdictions in the United States and Canada
as Salomon Brothers Inc designates and will continue such
qualification in effect so long as required for the resale
of the Securities by the Purchasers, provided that the
Company will 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.
(v) During the period of two years after the
Closing Date, the Company will, upon request, furnish to
Salomon Brothers Inc, each of the other
<PAGE>
14
Purchasers and any holder of Securities a description of
the restrictions on transfer applicable to the Securities.
(vi) During the period of two years after the
Closing Date, the Company will not, and will not permit any
of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities that have
been reacquired by any of them.
(vii) During the period of two years after the
Closing Date, the Company will not be or become, an
open-end investment company, unit investment trust or
face-amount certificate company that is or is required to
be registered under Section 8 of the Investment Company
Act, and is not, and will not be or become, a closed-end
investment company required to be registered, but not
registered, under the Investment Company Act.
(viii) The Company will pay all expenses
incidental to the performance of its obligations under this
Agreement and the Indenture, including (i) the fees and
expenses of the Trustee and its professional advisers and
(ii) all expenses in connection with the execution, issue,
authentication, packaging and initial delivery of the
Securities, the preparation and printing of this Agreement,
the Securities, the Indenture, the Preliminary Offering
Memorandum, the Offering Memorandum and amendments and
supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Securities. The
Company will also pay or reimburse the Purchasers (to the
extent incurred by them) for any expenses (including fees
and disbursements of counsel) incurred in connection with
qualification of the Securities for sale under the laws of
such jurisdictions in the United States and Canada as
Salomon Brothers Inc designates and the printing of
memoranda relating thereto for any fees charged by
investment rating agencies for the rating of the
Securities, and for expenses incurred in distributing the
Preliminary Offering Memorandum and the Offering Memorandum
(including any amendments and supplements thereto) to the
Purchasers.
(ix) In connection with the Offering, until
Salomon Brothers Inc shall have notified the
<PAGE>
15
Company and the other Purchasers of the completion of the
resale of the Securities, neither the Company nor any of
its affiliates has or will, either alone or with one or
more other persons, bid for or purchase for any account in
which it or any of its affiliates has a beneficial interest
any Securities or attempt to induce any person to purchase
any Securities; and neither it nor any of its affiliates
will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the
price of, the Securities.
5. Conditions to the Obligations of the
------------------------------------
Purchasers. The obligations of the Purchasers to purchase the Securities, shall
- ----------
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of their respective obligations hereunder and to
the following additional conditions precedent:
(a) The Company shall have furnished to the Purchasers the
opinion of Weil, Gotshal & Manges LLP, counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Delaware. Each of SEACOR Worldwide
Inc., SEACOR Marine Inc., SEACOR-SMIT Offshore
(International) Inc., SEACOR- SMIT Offshore I Inc., Graham
Boats Inc. and Graham Offshore Inc. (each a "Delaware
Subsidiary" and collectively, the "Delaware Subsidiaries")
is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. Each
of the Company and the Delaware Subsidiaries has all
requisite corporate power and authority to own its
properties and to conduct its business as described or
incorporated by reference in the Offering Memorandum;
(ii) the Indenture has been duly authorized,
executed and, when delivered by the Company (assuming the
due authorization, execution and delivery thereof by the
Trustee), will constitute
<PAGE>
16
the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether a
proceeding is sought at law or in equity); the Securities
have been duly authorized by the Company for issuance and,
when executed and delivered by the Company (and assuming
the due authorization, execution and delivery of the
Indenture by the Trustee and the execution and
authentication of the Securities in the manner prescribed
by the Indenture by a duly authorized officer of the
Trustee), will be duly executed, authenticated, issued and
delivered and will constitute valid and legally binding
obligations of the Company enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether a proceeding is sought at law or in equity); the
Securities conform to the description thereof contained in
the Offering Memorandum;
(iii) the Company is not an "investment company"
within the meaning of, and is not registered or otherwise
required to be registered under, the Investment Company Act
of 1940, as amended;
(iv) to the knowledge of such counsel, there is
no action, suit or proceeding pending before or threatened
by any court or public or governmental authority or
arbitrator involving the Company or any of its subsidiaries
of a character required to be disclosed in the Offering
Memorandum which is not adequately disclosed or
incorporated by reference in the Offering Memorandum;
(v) the Company has all requisite corporate power
and authority to execute and deliver the Purchase Agreement
and to perform its obligations thereunder; the execution,
delivery and
<PAGE>
17
performance of the Purchase Agreement by the Company and
the consummation by the Company of the transactions
contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Company; the
Purchase Agreement has been duly authorized, executed and
delivered by the Company;
(vi) no consent, approval, waiver, license,
permit, authorization or other action by or filing with any
New York, Delaware corporate or United States governmental
authority is required in connection with the issuance and
sale by the Company to the Purchasers on the Closing Date
of the Securities, or the consummation by the Company of
the transactions contemplated by the Purchase Agreement,
the Indenture or the Registration Agreement, except for (i)
state securities or "blue sky" laws, rules or regulations,
and maritime and admiralty laws, rules and regulations, and
(ii) with respect to the Registration Agreement only,
filings and other actions required pursuant to the
Securities Act, the Exchange Act, the Trust Indenture Act
of 1939, as amended, and the rules and regulations of the
Commission promulgated thereunder, as to all of which we
express no opinion, and those consents, approvals, waivers,
licenses, permits or authorizations which have heretofore
been obtained;
(vii) none of the issuance and sale by the
Company of the Securities pursuant to the Purchase
Agreement, the execution and delivery of the Purchase
Agreement, the Indenture or the Registration Agreement, the
compliance by the Company with the terms and provisions
thereof, or the consummation by the Company of any of the
transactions contemplated thereby, will conflict with,
constitute a default under, or violate (i) any of the
terms, conditions or provisions of the Restated Certificate
of Incorporation or Amended By-laws of the Company, (ii)
any of the terms, conditions or provisions of any document,
agreement or other instrument to which the Company or any
of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound, of which we are aware,
(iii) any New York, Delaware corporate or United States
federal law or regulation (other than United States federal
and state securities or "blue sky" laws, rules and
<PAGE>
18
regulations, as to which such counsel need not express any
opinion in this paragraph and maritime and admiralty laws,
rules and regulations, as to which such counsel need not
express any opinion), or (iv) any judgment, writ,
injunction, decree or order of any court or governmental
authority binding on the Company or any of its subsidiaries
(other than public or governmental authorities having
jurisdiction over maritime or admiralty matters or who
promulgate, enforce or interpret any maritime or admiralty
laws, rules or regulations, as to which such counsel need
not express any opinion) of which such counsel is aware;
(viii) neither the registration of the Securities
under the Securities Act, nor the qualification of the
Indenture under the Trust Indenture Act of 1939, as
amended, with respect thereto, is required for the offer
and sale of the Securities by the Company to the Purchasers
or the reoffer and resale of the Securities by the
Purchasers in the manner contemplated by the Purchase
Agreement and the Offering Memorandum;
(ix) the outstanding shares of capital stock of
each Delaware Subsidiary are duly authorized, validly
issued, fully paid and nonassessable and are owned of
record and, to such counsel's knowledge, beneficially, by
the Company either directly or indirectly through wholly
owned subsidiaries, free and clear, to such counsel's
knowledge, of all liens, security interests, encumbrances
or claims;
(x) the Company's authorized capitalization is as
set forth in the Offering Memorandum under the caption
"Capitalization" and all of the outstanding shares of
capital stock of the Company have been duly authorized,
validly issued, fully paid and are nonassessable;
(xi) the Registration Agreement has been duly
authorized by the Company and, when executed and delivered,
will conform in all material respects to the description
thereof contained in the Offering Memorandum; the
Registration Agreement, when validly executed and delivered
by the Company, will constitute a valid and legally binding
obligation of the Company and will be enforceable against
it in accordance with its
<PAGE>
19
terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether a proceeding is sought at law or in equity) and
except that rights to indemnification and contribution
thereunder may be limited by federal or state securities
laws or public policy relating thereto;
(xii) except as disclosed in the Offering
Memorandum or as exhibits to documents incorporated by
reference in the Offering Memorandum, no holders of
securities of the Company have rights to the registration
of such securities under the Restated Certificate of
Incorporation of the Company or pursuant to the terms of
any agreement to which the Company is a party, of which
such counsel is aware;
(xiii) the statements in the Offering Memorandum
under the caption "Description of Notes" insofar as they
describe the provisions of the documents and instruments
therein described, constitute fair summaries thereof
accurate in all material respects, and the statements in
the Offering Memorandum under the caption "Certain United
States Federal Income Tax Considerations for Non-U.S.
Holders" insofar as they purport to describe federal income
tax laws of the United States fairly present in all
material respects the information set forth therein.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United States or
the corporation law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the
Offering Memorandum in this paragraph (b) include any supplements
thereto on or prior to the Closing Date.
<PAGE>
20
In addition to the foregoing, such counsel shall
state that it has participated in conferences with directors,
executive officers and other representatives of the Company,
representatives of the Purchasers and their counsel and
representatives of the Company's independent public accountants, at
which conferences the contents of the Offering Memorandum and related
matters were discussed, and although such counsel has not
independently verified and has not passed upon or assumed any
responsibility for the accuracy, completeness or fairness of the
statements contained in such documents, no facts have come to such
counsel's attention to lead it to believe that the Offering
Memorandum and any further amendments or supplements thereto as of
their respective dates and on the date of such opinion letter
contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated
therein, or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need not express any view with respect
to the financial statements and related notes, the financial
statement schedules and the other financial, statistical and
accounting data included in the Offering Memorandum).
(b) The Company shall have furnished to the Purchasers the
opinion of De Brauw Blackstone Westbroek, Netherlands counsel for the
Company, dated the Closing Date, in form and substance satisfactory
to you, to the effect that each of SEACOR-SMIT Offshore I B.V. and
SEACOR-SMIT Holdings B.V. (each a "Netherlands Subsidiary" and
collectively the "Netherlands Subsidiaries") has been duly
incorporated and is validly existing under the laws of the
Netherlands as a private company with limited liability, with full
corporate power and authority to own its properties and conduct its
business within the scope of its objects clause as set forth in its
articles of association; all the outstanding shares of capital stock
of each Netherlands Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Offering Memorandum, all outstanding
shares of capital stock of the Netherlands Subsidiaries are owned by
the Company either directly or through wholly owned subsidiaries free
and clear of any pledge, right of usufruct or attachment.
<PAGE>
21
(c) The Company shall have furnished to the Purchasers the
opinion of Fort & Schlefer, special counsel for the Company, dated
the Closing Date, in form and substance satisfactory to you, to the
effect that SEACOR-SMIT Offshore (Worldwide) Ltd. has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the Bahamas, with full corporate power and
authority to own its properties and conduct its business as described
in the Offering Memorandum; all the outstanding shares of capital
stock of SEACOR-SMIT Offshore (Worldwide) Ltd. have been duly and
validly authorized and issued and are fully paid and nonassessable,
and all outstanding shares of capital stock of SEACOR-SMIT Offshore
(Worldwide) Ltd. are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry,
any other security interests, claims, liens or encumbrances.
(d) The Company shall have furnished to the Purchasers the
opinion of Fort & Schlefer, special regulatory counsel for the
Company, dated the Closing Date, to the effect that:
(i) the issue and sale of the Securities and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
herein contemplated will not conflict with, or violate or
constitute a default under, (a) any U.S. Federal maritime
or admiralty law or regulation, or (b) any judgment, writ,
injunction, decree or order binding on the Company or any
of its subsidiaries of which such counsel is aware of any
U.S. Federal court or governmental authority having
jurisdiction over any maritime or admiralty matters or who
enforce or interpret any maritime or admiralty laws or
promulgate any regulations as to such matters;
(ii) no consent, approval, waiver, license or
other authorization by or filing with any U.S. Federal
maritime or admiralty governmental authority is required
for the issue and sale of the Securities or the
consummation by the Company of the transactions
contemplated herein;
(iii) on the Closing Date, the Company is a
citizen of the United States within the meaning of
Section 2 of the Shipping Act and was qualified to
<PAGE>
22
operate vessels in the coastwise trade of the
United States; and
(iv) the statements in the Company's Form 10-K
for the year ended December 31, 1996 (the"10-K") under the
captions "Business--Offshore Marine Services--Government
Regulation--Domestic Regulation" and "--Foreign Regulation"
fairly identify the domestic governmental and international
maritime regulation to which the Company is subject.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any jurisdiction other
than the District of Columbia or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Purchasers and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Offering Memorandum in this paragraph (d) include
any supplements thereto at the Closing Date.
(e) The Purchasers shall have received from Cravath, Swaine
& Moore, counsel for the Purchasers, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Offering Memorandum (other than the financial
statements and related schedules therein, as to which such counsel
need express no view), the exemption from registration for the offer
and sale of the Securities by the Company to the several Purchasers
and the resales by the several Purchasers as contemplated hereby and
other related matters as the Purchasers may reasonably require, and
the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(f) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of
the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Offering Memorandum
together with any supplements thereto, and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in
<PAGE>
23
all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) since the date of the most recent financial
statements incorporated by reference in the Offering
Memorandum (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial
or other), earnings, business or properties of the Company
and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Offering Memorandum
(exclusive of any supplement thereto).
(g) At the Execution Time and at the Closing Date, Arthur
Andersen LLP shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning
of the Act and the applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules and pro forma
financial statements included or incorporated in the
Offering Memorandum and reported on by them comply in form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries; their limited review in
accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited
interim financial information for the six-month period
ended June 30, 1997, and as at June 30, 1997, as indicated
in their report incorporated by reference in the Offering
Memorandum; carrying out certain specified procedures (but
not an examination in accordance with generally accepted
auditing standards) which would not necessarily
<PAGE>
24
reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of
the Company and its subsidiaries; and inquiries of certain
officials of the Company who have responsibility for finan-
cial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to
December 31, 1996, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included in the Offering Memorandum do not comply
in form in all material respects with applicable
accounting requirements and with the published
rules and regulations of the Commission with
respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied
on a basis substantially consistent with that of
the audited financial statements included in the
Offering Memorandum;
(2) with respect to the period subse
quent to June 30, 1997, there were any changes,
at a specified date not more than three business
days prior to the date of the letter, in the
long-term debt of the Company and its
subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the
Company or decreases in working capital of the
Company and its subsidiaries as compared with the
amounts shown on the June 30, 1997, consolidated
balance sheet included or incorporated by
reference in the Offering Memorandum, or for the
period from July 1, 1997, to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in
operating income, net revenues or income before
income taxes or in total or per share amounts of
net income of the Company and its subsidiaries,
except in all instances for changes or decreases
set forth in such letter, in which case the
letter shall be accompanied by an explanation by
the Company as to the significance thereof unless
said
<PAGE>
25
explanation is not deemed necessary by the
Purchasers;
(iii) they have performed certain other speci-
fied procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Offering Memorandum and the
documents incorporated by reference therein, including the
information set forth under the captions "Summary", "Risk
Factors", "Use of Proceeds" and "Capitalization", and
certain other specified information incorporated by
reference in the Offering Memorandum agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited
pro forma financial statements incorporated by reference in
the Offering Memorandum (the "pro forma financial
statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the pro
forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial
statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02
of Regulation S-X.
References to the Offering Memorandum in this
paragraph (g) include any supplement thereto at the date of
the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Offering Memorandum
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (g) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the
<PAGE>
26
judgment of the Purchasers, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Offering Memorandum
(exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not have
been (i) any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act)
or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change, (ii) any suspension of
trading in the Company's Common Stock by the Commission or the New
York Stock Exchange, Inc. or any suspension or limitation of trading
in securities generally on the New York Stock Exchange, Inc. or The
Nasdaq Stock Market's National Market or any establishment of minimum
prices on either of such Exchange or Market System, (iii) any
declaration of a banking moratorium either by Federal or New York
State authorities or (iv) any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is
such as to make it, in the judgment of the Purchasers, impracticable
or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Offering Memorandum (exclusive of
any supplement thereto).
(j) Prior to the Closing Date, the Company shall have
furnished to the Purchasers such further information, certificates
and documents as the Purchasers may reasonably request.
(k) The Registration Agreement shall have been duly
executed and delivered by the Company.
If any of the conditions specified in this
Section 5 shall not have been fulfilled in all material respects when and as
provided in this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Purchasers and counsel for
the Purchasers, this Agreement and all obligations of the Purchasers hereunder
may be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be
<PAGE>
27
given to the Company in writing or by telephone or telegraph
confirmed in writing.
The documents required to be delivered by this
Section 5 shall be delivered at the office of Cravath, Swaine & Moore, counsel
for the Purchasers, at Worldwide Plaza, 825 Eighth Avenue, New York, New York,
on the Closing Date.
6. Reimbursement of Purchasers' Expenses. If the
-------------------------------------
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Purchasers set forth in Section 5 hereof is
not satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Purchasers, the Company will
reimburse the Purchasers severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
7. Indemnification and Contribution. (a) The
--------------------------------
Company agrees to indemnify and hold harmless each Purchaser, the directors,
officers, employees and agents of each Purchaser and each person who controls
any Purchaser within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum or any amendment or supplement thereto, or
the incorporated Exchange Act Reports, 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 in order to make the statements therein not
misleading, and will reimburse each Purchaser, promptly after the receipt of
demand therefor accompanied by an invoice in reasonable detail, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any
<PAGE>
28
Purchaser through Salomon Brothers Inc specifically for inclusion therein, it
being understood and agreed that the only such information consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from the Preliminary Offering Memorandum, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Purchaser that sold the Securities concerned to the person
asserting any such losses, claims, damages or liabilities, to the extent that
such sale was an initial resale by such Purchaser and any such loss, claim,
damage or liability of such Purchaser 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 Offering Memorandum
(exclusive of any material included therein but not attached thereto) if the
Company had previously furnished copies thereof to such Purchaser. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Purchaser will severally and not jointly
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Purchaser, but only with reference to written information
relating to such Purchaser furnished to the Company by or on behalf of such
Purchaser through Salomon Brothers Inc specifically for inclusion in the
documents referred to in the foregoing indemnity, it being understood and agreed
that the only such information furnished by any Purchaser consists of the
following information in the Offering Memorandum furnished on behalf of each
Purchaser: The last paragraph at the bottom of the cover page concerning the
terms of the offering by the Purchasers, the legend concerning stabilizing on
page three of the Offering Memorandum, the second sentence of the second
paragraph and the sixth paragraph, each under the caption "Plan of
Distribution." This indemnity agreement will be in addition to any liability
which any Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a) or
(b) above unless and to the
<PAGE>
29
extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
repre- sent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of one firm of such separate counsel plus one firm of counsel in each local
jurisdiction where the employment of separate local counsel is necessary or
material to the defense of an action by the indemnified party if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 7 is unavailable to or
<PAGE>
30
insufficient to hold harmless an indemnified party for any reason, the Company
and the Purchasers agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company, and one or more of the Purchasers may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and by the Purchasers, respectively, from the offering of the
Securities; provided, however, that in no case shall any Purchaser (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Purchasers shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Purchasers, respectively, in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. For the purpose of this
subparagraph 7(d), benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by each of them, and benefits received by the Purchasers shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Offering Memorandum. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Purchasers. The Company
and the Purchasers agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls a Purchaser within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of a Purchaser shall have the
same rights to contribution as such Purchaser, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
<PAGE>
31
8. Default by a Purchaser. If any one or more
----------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Purchaser or Purchasers hereunder on the Closing Date and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Purchasers shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Securities set forth opposite the names of all
the remaining Purchasers) the Securities which the defaulting Purchaser or
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Purchaser or
Purchasers agreed but failed to purchase shall exceed 10% of the total principal
amount of Securities that the Purchasers are obligated to purchase on such
Closing Date, the remaining Purchasers shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Purchasers do not purchase all the Securities to be
purchased on such Closing Date, this Agreement will terminate without liability
to any nondefaulting Purchaser or the Company. In the event of a default by any
Purchaser as set forth in this Section 8, such Closing Date shall be postponed
for such period, not exceeding seven days, as the Purchasers shall determine in
order that the required changes in the Offering Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Purchaser of its liability, if any, to the Company
and any nondefaulting Purchaser for damages occasioned by its default hereunder.
As used in this Agreement, the term "Purchaser" includes any person substituted
for a Purchaser under this Section.
9. Representations and Indemnities to Survive.
------------------------------------------
The respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchasers set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Purchaser or the Company or any
of the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancelation of this Agreement.
10. Notices. All communications hereunder will be
-------
in writing and effective only on receipt, and, if sent to the Purchasers, will
be mailed, delivered or telegraphed and confirmed to them, care of Salomon
Brothers Inc, at Seven
<PAGE>
32
World Trade Center, New York, New York, 10048, Attention: Investment Banking
Department; or, if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it at 1370 Avenue of the Americas, 25th Floor, New York, New
York 10019, attention of Randall Blank.
11. Successors. This Agreement will inure to the
----------
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 7 hereof, and no other person will have any right or obligation
hereunder.
12. Representation of Purchasers. Salomon
----------------------------
Brothers Inc will act for the several Purchasers in connection with the
transactions contemplated by this Agreement, and any action under this Agreement
taken by the Purchasers jointly or by Salomon Brothers Inc will be binding upon
all the Purchasers.
13. Applicable Law. This Agreement shall be governed
--------------
by and construed in accordance with the laws of the State of New York without
regard to principle of conflicts of laws.
The Company hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
14. Counterparts. This Agreement may be executed
------------
by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us the
<PAGE>
33
enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Purchasers.
Very truly yours,
SEACOR SMIT Inc.
By: /s/ Randall Blank
--------------------------
Name: Randall Blank
Title: Executive Vice President
Chief Financial Officer
and Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
By: Salomon Brothers Inc
By: /s/ Mark Renton
------------------------
Name: Mark Renton
Title: Director
<PAGE>
Schedule I
Purchasers
Principal
Purchasers Amount
- ---------- -------
Salomon Brothers Inc....................................... $50,000,000
Bear, Stearns & Co. Inc.................................... 50,000,000
Credit Suisse First Boston Corporation..................... 50,000,000
...........
TOTAL $150,000,000
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
SEACOR SMIT Inc.
7.20% Senior Notes Due 2009
REGISTRATION AGREEMENT
New York, New York
Dated as of September 22, 1997
Salomon Brothers Inc
Bear, Stearns & Co. Inc.
Credit Suisse First Boston Corporation
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
SEACOR SMIT Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Salomon Brothers Inc, Bear, Stearns &
Co. Inc. and Credit Suisse First Boston Corporation (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), its 7.20% Senior Notes Due 2009 (the
"Securities") (the "Initial Placement"). As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to 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 from time to time of the Securities until
such time as such Securities have been sold pursuant to an Exchange Offer
Registration Statement or Shelf Registration Statement (as defined below)
(including the Initial Purchasers) (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein
-----------
without definition shall have their respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
<PAGE>
2
"Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Affiliate" of any specified person means any
other person which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such specified person. For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Closing Date" has the meaning set forth in the
Purchase Agreement.
"Commission" means the Securities and Exchange
Commission.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Exchange Offer Registration Period" means the
180-day period following the consummation of the Registered Exchange Offer,
exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a
registration statement of the Company on an appropriate form under the Act with
respect to the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may
include the Initial Purchasers) which is a broker-dealer, electing to exchange
Securities acquired for its own account as a result of market-making activities
or other trading activities, for New Securities.
"Final Memorandum" has the meaning set forth in
the Purchase Agreement.
<PAGE>
3
"Holder" has the meaning set forth in the preamble
hereto.
"Indenture" means the Indenture relating to the
Securities dated as of September 22, 1997, between the Company and First Trust
National Association, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in
the preamble hereto.
"Majority Holders" means the Holders of a majority
of the aggregate principal amount of Securities registered
under a Registration Statement.
"Managing Underwriters" means the investment
banker or investment bankers and manager or managers that shall administer an
underwritten offering.
"New Securities" means debt securities of the
Company identical in all material respects to the Securities (except that the
cash interest and interest rate step-up provisions and the transfer restrictions
will be modified or eliminated, as appropriate), to be issued under the
Indenture or the New Securities Indenture.
"New Securities Indenture" means an indenture
between the Company and the New Securities Trustee, identical in all material
respects with the Indenture (except that the cash interest and interest rate
step-up provisions will be modified or eliminated, as appropriate).
"New Securities Trustee" means a bank or trust
company reasonably satisfactory to the Purchaser, as trustee with respect to the
New Securities under the New Securities Indenture.
"Prospectus" means the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Securities or the New Securities, covered
by such
<PAGE>
4
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Registered Exchange Offer" means the proposed
offer to the Holders to issue and deliver to such Holders, in exchange for the
Securities, a like principal amount of the New Securities.
"Registration Statement" means any Exchange Offer
Registration Statement or Shelf Registration Statement that covers any of the
Securities or the New Securities pursuant to the provisions of this Agreement,
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Securities" has the meaning set forth in the
preamble hereto.
"Shelf Registration" means a registration effected
pursuant to Section 3 hereof.
"Shelf Registration Period" has the meaning set
forth in Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf"
registration statement of the Company pursuant to the provisions of Section 3
hereof which covers some or all of the Securities or New Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Trustee" means the trustee with respect to the
Securities under the Indenture.
"underwriter" means any underwriter of Securities
in connection with an offering thereof under a Shelf
Registration Statement.
2. Registered Exchange Offer; Resales of New
-----------------------------------------
Securities by Exchanging Dealers; Private Exchange. (a) The Company shall
- --------------------------------------------------
prepare and, not later than 150 days
<PAGE>
5
following the date of original issuance of the Securities, shall file with
the Commission the Exchange Offer Registration Statement with respect to the
Registered Exchange Offer. The Company shall use its best efforts to cause
the Exchange Offer Registration Statement to become effective under the Act
within 180 days of the date of original issuance of the Securities.
(b) Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for New Securities
(assuming that such Holder is not an affiliate of the Company within the
meaning of the Act, acquires the New Securities in the ordinary course of
such Holder's business and has no arrangements with any person to participate
in the distribution of the New Securities) to trade such New Securities from
and after their receipt without any limitations or restrictions under the Act
and without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange
Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less
than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(iii) utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of
Manhattan, The City of New York; and
(iv) comply in all respects with all applicable
laws.
(d) As soon as practicable after the close of the
Registered Exchange Offer, the Company shall:
<PAGE>
6
(i) accept for exchange all Securities tendered
and not validly withdrawn pursuant to the Registered
Exchange Offer;
(ii) deliver to the Trustee for cancelation all
Securities so accepted for exchange; and
(iii) cause the Trustee or the New Securities Trustee, as
the case may be, promptly to authenticate and deliver to each Holder
of Securities New Securities equal in principal amount to the
Securities of such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company
acknowledge that, pursuant to interpretations by the Commission's staff of
Section 5 of the Act, and in the absence of an applicable exemption therefrom,
each Exchanging Dealer is required to deliver a Prospectus in connection with a
sale of any New Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer in exchange for Securities acquired for its own
account as a result of market-making activities or other
trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on
the cover of the Exchange Offer Registration Statement, in Annex B
hereto in the forepart of the Exchange Offer Registration Statement
in a section setting forth details of the Exchange Offer, and in
Annex C hereto in the underwriting or plan of distribution section of
the Prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto in
the Letter of Transmittal delivered pursuant to the Registered
Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during
the Exchange Offer Registration Period for delivery by Exchanging
Dealers in connection with sales of New Securities received pursuant
to the Registered Exchange Offer, as contemplated by Section 4(h)
below.
(f) In the event that any Initial Purchaser
determines that it is not eligible to participate in the Registered Exchange
Offer with respect to the exchange of
<PAGE>
7
Securities constituting any portion of an unsold allotment, at the request of
such Initial Purchaser, the Company shall issue and deliver to such Initial
Purchaser or the party purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from such Initial
Purchaser, in exchange for such Securities, a like principal amount of New
Securities. The Company shall seek to cause the CUSIP Service Bureau to issue
the same CUSIP number for such New Securities as for New Securities issued
pursuant to the Registered Exchange Offer.
3. Shelf Registration. If, (i) because of any
------------------
change in law or applicable interpretations thereof by the Commission's staff,
the Company determines upon advice of its outside counsel that it is not
permitted to effect the Registered Exchange Offer as contemplated by Section 2
hereof, or (ii) if for any other reason the Registered Exchange Offer is not
declared effective within 180 days following the date of original issuance of
the Securities, or (iii) if any Initial Purchaser so requests with respect to
Securities held by it constituting any portion of an allotment remaining unsold
after 30 days following the date hereof, or (iv) in the case of any Initial
Purchaser that participates in the Registered Exchange Offer or acquires
New Securities pursuant to Section 2(f) hereof, such Initial Purchaser does not
receive freely tradeable New Securities in exchange for Securities constituting
any portion of an unsold allotment (it being understood that, for purposes of
this Section 3, (x) the requirement that an Initial Purchaser deliver a
Prospectus containing the information required by Items 507 and/or 508 of
Regulation S-K under the Act in connection with sales of New Securities acquired
in exchange for such Securities shall result in such New Securities being not
"freely tradeable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities
being not "freely tradeable"), the following provisions shall apply:
(a) The Company shall, at its cost, as promptly
as practicable, file with the Commission and thereafter shall use its best
efforts to cause to be declared effective by the 210th day after the original
date of issuance of the
<PAGE>
8
Securities under the Act a Shelf Registration Statement relating to the offer
and sale of the Securities or the New Securities, as applicable, by the
Holders from time to time in accordance with the methods of distribution set
forth in such Shelf Registration Statement and Rule 415 under the Act;
PROVIDED that with respect to New Securities received by an Initial Purchaser
in exchange for Securities constituting any portion of an unsold allotment,
the Company may, if permitted by current interpretations by the Commission's
staff, file a post-effective amendment to the Exchange Offer Registration
Statement containing the information required by Regulation S-K Items 507
and/or 508, as applicable, in satisfaction of its obligations under this
paragraph (a) with respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and governed by the
provisions herein applicable to, a Shelf Registration Statement; PROVIDED,
FURTHER, 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 as provided in a
written notice and questionnaire delivered to all Holders (including the
Initial Purchasers) notifying such Holders that a Shelf Registration
Statement will be filed by the Company, requesting such information with
respect to the Holders as required to be disclosed by the Shelf Registration
Statement and setting forth a deadline for response therein (which in no
event shall be less than 30 calendar days).
(b) The Company shall use its best efforts to
keep the Shelf Registration Statement continuously effective in order to permit
the Prospectus forming part thereof to be lawfully delivered by Holders until
the earliest of (x) the second anniversary of the date of original issuance of
the Securities (or the first anniversary of the effective date if such Shelf
Registration Statement is filed at the request of the Initial Purchasers), (y)
the time when the Securities registered thereunder can be sold by non-affiliates
pursuant to Rule 144 under the Securities Act without limitation under clauses
(c), (e), (f) and (h) of Rule 144, or (z) such time as all the Securities
registered thereunder have been sold (in any such case, such period being called
the "Shelf Registration Period"). During any consecutive 365-day period, the
Company will have the ability to suspend the availability of the Shelf
Registration Statement for up to two periods of up to 45 consecutive days, but
no more than
<PAGE>
9
an aggregate of 60 days during any 365-day period. The Company shall be
deemed not to have used its best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any
action that would result in Holders of Securities covered thereby not being
able to offer and sell such Securities during that period, unless (i) such
action is required by applicable law, or (ii) upon the occurrence of any
event contemplated by paragraph 4(c)(2)(iii) below, such action is taken by
the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder), so long as the Company
promptly thereafter complies with the requirements of Section 4(k) hereof, if
applicable, if the Company has determined in good faith that there are no
material legal or commercial impediments in so doing.
4. Registration Procedures. In connection with
-----------------------
any Shelf Registration Statement and, to the extent applicable, any Exchange
Offer Registration Statement, the following provisions shall apply:
(a) The Company shall, furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement and any Exchange Offer Registration Statement,
and each amendment thereof and each amendment or supplement, if any,
to the Prospectus included therein and, in the event that an Initial
Purchaser (with respect to any portion of an unsold allotment from
the original offering) is participating in the Registration
Statement, shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as the
Initial Purchasers reasonably may propose and (ii) include the names
of the Holders who propose to sell Securities pursuant to the Shelf
Registration Statement, as selling securityholders.
(b) Notwithstanding any other provisions of this Agreement
to the contrary, the Company shall cause (other than with respect to
information required to be supplied by the selling Holders pursuant
to this Agreement) the (i) any Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects
with the applicable requirements of the Act and the rules and
regulations of the Commission thereunder, (ii) any Registration
<PAGE>
10
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus
forming part of any Registration Statement, and any amendment or
supplement to such Prospectus, does not 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 the
light of the circumstances under which they were made, not
misleading.
(c) (1) The Company shall advise the Initial Purchasers in
writing and, in the case of a Shelf Registration Statement, the
Holders of Securities covered thereby:
(i) when a Registration Statement and any
amendment thereto has been filed with the Commission and
when the Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Registration Statement or
the Prospectus included therein or for additional
information.
(2) The Company shall advise the Initial Purchasers in
writing and, in the case of a Shelf Registration Statement, the
Holders of Securities covered thereby, and, in the case of an
Exchange Offer Registration Statement, any Exchanging Dealer which
has provided in writing to the Company a telephone or facsimile
number and address for notices:
(i) of the issuance by the Commission of any
stop order suspending the effectiveness of the
Registration Statement or the initiation of any
proceedings for that purpose;
(ii) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities included therein for sale
in any jurisdiction or the initiation or
<PAGE>
11
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires
the Company to make any changes in the Registration
Statement or the Prospectus so that, as of such date, the
statements therein 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 shall be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made and which need not provide
any detail as to the nature of such event).
(d) The Company shall use reasonable commercial efforts to
obtain the withdrawal of any order suspending the effectiveness of
any Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities
included within the coverage of any Shelf Registration Statement,
without charge, one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits
thereto (other than those, if any, incorporated by reference).
(f) The Company shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the
coverage of any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request; and the
Company consents, 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 of Securities 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.
<PAGE>
12
(g) The Company shall furnish to each Exchanging Dealer
which so requests, without charge, at least one copy of the Exchange
Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, any documents
incorporated by reference therein, and, if the Exchanging Dealer so
requests in writing, all exhibits thereto (other than those, if any,
incorporated by reference).
(h) The Company shall, during the Exchange Offer
Registration Period, promptly deliver to each Exchanging Dealer,
without charge, as many copies of the Prospectus included in such
Exchange Offer Registration Statement and any amendment or supplement
thereto as such Exchanging Dealer may reasonably request for delivery
by such Exchanging Dealer in connection with a sale of New Securities
received by it pursuant to the Registered Exchange Offer; and the
Company consents to the use of the Prospectus or any amendment or
supplement thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other
offering of Securities pursuant to any Registration Statement, the
Company shall register or qualify or cooperate with the Holders of
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 Holders reasonably request in
writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Registration Statement; PROVIDED, HOWEVER,
that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to
take any action which would subject it to general service of process
or to taxation in any such jurisdiction where it is not then so
subject.
(j) The Company shall cooperate with the Holders of
Securities to facilitate the timely preparation and delivery of
certificates representing Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and
<PAGE>
13
registered in such names as Holders may request prior to sales of
Securities pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by
paragraph (c) above during the period for which the Company is
required to maintain an effective Registration Statement, the Company
shall promptly prepare a post-effective amendment to any Registration
Statement or an amendment or supplement to the related Prospectus or
file any other required document so that, as thereafter delivered to
purchasers of the Securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. If the Company notifies the Initial Purchasers or the
Holders in accordance with paragraphs (i) through (iii) of Section
4(c)(2) 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.
(l) Not later than the effective date of any such
Registration Statement hereunder, the Company shall provide a CUSIP
number for the Securities or New Securities, as the case may be,
registered under such Registration Statement, and provide the
applicable trustee with printed certificates for such Securities or
New Securities, in a form eligible for deposit with The Depository
Trust Company.
(m) The Company will comply with all rules and regulations
of the Commission to the extent and so long as they are applicable to
the Registration Statement 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
Registration Statement, which statement shall cover such 12-month
period.
<PAGE>
14
(n) The Company shall cause the Indenture or the New
Securities Indenture, as the case may be, to be qualified under the
Trust Indenture Act in a timely manner, 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.
(o) The Company may require each Holder of Securities to be
sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of
such Securities as the Company may from time to time reasonably
require for inclusion in such Registration Statement, and the Company
may exclude from such registration the Securities of any Holder that
fails to furnish such information within a reasonable time after
receiving such request.
(p) The Company shall, if requested, promptly incorporate
in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Majority Holders
reasonably agree should be included therein and shall make all
required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the
Company shall enter into such agreements and shall use reasonable
commercial efforts to take all other steps in order to expedite or
facilitate the registration or the disposition of the Securities.
(r) In the case of any Shelf Registration Statement, the
Company shall (i) make reasonably available for inspection by the
Holders of the Securities to be registered thereunder, and any
attorney, accountant or other agent retained by the Holders 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
<PAGE>
15
the Holders or any such attorney, accountant or agent in connection
with any such 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 any information that is designated in
writing by the Company, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by the
Holders or any such attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required
by law, or such information becomes available to the public
generally or through a third party without an accompanying
obligation of confidentiality and 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
Registration Statement and (ii) shall not be available for any such
Holder that is a competitor of the Company.
(s) In the case of any Exchange Offer Registration
Statement, the Company shall (i) make reasonably available for
inspection by such Purchaser, and any attorney, accountant or other
agent retained by such Purchaser, 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 such Initial Purchaser or any such attorney,
accountant or agent in connection with any such 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
any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such attorney,
accountant or agent, unless such disclosure is made in connection
with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party
without an
<PAGE>
16
accompanying obligation of confidentiality and 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 Registration Statement and (ii) shall not be available for
any such Holder that is a competitor of the Company.
(t) 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 Registration Statement (it being agreed that the matters
to be covered by such opinion shall include, without limitation, the
due incorporation and good standing in its jurisdiction of
incorporation of the Company and its Significant Subsidiaries (as
defined in the Act); 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
Registration Statement, or the offering and sale of the applicable
Securities; the compliance as to form of such 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 Registration Statement or most recent
post-effective amendment thereto, as the case may be, to confirm, in
customary form and substance of such counsel, the absence from such
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
<PAGE>
17
"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
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.
(v) The Company will use its best efforts to continue to
have the Securities rated by the rating agencies that rated the
Securities 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 Securities at the time of such request.
(w) The Company shall use reasonable commercial efforts to
take all other steps necessary to effect the registration of the
Securities covered by the Registration Statement contemplated hereby.
5. Registration Expenses. The Company shall bear
---------------------
all expenses incurred in connection with the performance of its obligations
under Sections 2, 3 and 4 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 Statement for the reasonable
fees and disbursements of the Designated Counsel, if any, and, in the case of
any Exchange Offer Registration Statement, will reimburse the Initial Purchasers
for the reasonable fees and disbursements of the Designated Counsel, if any,
acting in connection therewith.
6. Indemnification and Contribution. (a) In
--------------------------------
connection with any Registration Statement, the Company agrees to indemnify and
hold harmless each Holder of securities covered thereby (including each Initial
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 4(h) hereof, each Exchanging Dealer), and each person, if any, who
controls any such Holder within the meaning of either the Act or the Exchange
Act (each Holder
<PAGE>
18
and such controlling persons are referred to collectively as the "Indemnified
Parties") from and against any and all 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 Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
as originally filed or in any amendment thereof, or in any preliminary
Prospectus or Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and subject to subsection (c),
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 will 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 4(k), or (y) any such 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 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 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
<PAGE>
19
to such person, a copy of the final prospectus if the Company had previously
furnished copies thereof in sufficient quantity 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 of Securities covered by a
Registration Statement (including each Initial Purchaser and, with respect to
any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging
Dealer) severally and not jointly, will indemnify and hold harmless the Company
and each person who controls the Company within the meaning of either the Act or
the Exchange Act to the same extent as the foregoing indemnity from the Company
to each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified
party under this Section 6 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
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure 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 6 for any legal or other
expenses, other than reasonable costs of
<PAGE>
20
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) In the event that the indemnity provided in (a) or
(b) of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable 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 such
indemnifying party or parties, on the one hand, and such indemnified party,
on the other hand, from the Initial Placement and the Registration Statement
which resulted in such losses, claims, damages or liabilities; PROVIDED,
HOWEVER, that in no case shall any Initial Purchaser or any subsequent Holder
of any Security or New Security be responsible, in the aggregate, for any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the 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. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and
the indemnified party shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of
such indemnifying party, on the one hand, and such indemnified party, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. Relative fault 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 provided by the
indemnifying party, on the one
<PAGE>
21
hand or by the indemnified party, on the other hand 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 the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
6, each person, if any, who controls such Indemnified Party within the
meaning of either the 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 either the Act or the Exchange Act shall
have the same rights to contribution as the Company.
(e) The agreements contained in this Section 6 will
survive the sale by a Holder of Securities covered by a Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancelation of this Agreement or any investigation made by or
on behalf of any indemnified party.
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 manner and, if at any time the Company is
not required to file such reports, it will, upon the request of any Holder of
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
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell 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
<PAGE>
22
Company to register any of its Securities pursuant to the Exchange Act.
7. Additional Interest Under Certain
---------------------------------
Circumstances. (a) Interest in addition to the stated interest (the "Additional
- -------------
Interest") with respect to the Securities 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) by the 150th day following the date of original
issuance of the Securities, the Exchange Offer Registration Statement
is not filed with the Commission;
(ii) by the 180th day following the date of original
issuance of the Securities, neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offer is not
permitted as described above) the Shelf Registration Statement is
filed with the Commission; or
(iii) by the 210th day following the date of original
issuance of the Securities, the Exchange Offer is not consummated or
the Shelf Registration Statement is not declared effective with
respect thereto,
Additional Interest shall accrue on the Securities over and above the interest
set forth in the title of the Securities 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 0.25% per annum of
the principal amount of such Securities for each Registration Default.
(b) The aggregate amount of Additional Interest
payable pursuant to the above provisions will in no event exceed 0.25% per annum
of the principal amount of the Securities which, except as otherwise provided
herein, shall be the sole and exclusive remedy for such Registration Default.
Upon (x) the filing of the Exchange Offer Registration Statement after the
150-day period described in clause (i) of subsection (a), (y) the effectiveness
of the Exchange Offer Registration Statement or the filing of the Shelf
Registration Statement after the 180-day period described in clause (ii) of
subsection (a) or (z) the
<PAGE>
23
consummation of the Exchange Offer for such Securities or the effectiveness
of a Shelf Registration Statement, as the case may be, after the 210-day
period described in clause (iii) of subsection (a), the Additional Interest
payable on such Securities as a result of the applicable Registration Default
will cease to accrue. For purposes of the preceding sentence, the curing of a
Registration Default by the means described in clause (y) of this subsection
shall constitute a cure of the Registration Defaults described in clauses (i)
and (ii) of subsection (a), and the curing of a Registration Default by the
means described in clause (z) of this subsection shall constitute a cure of
the Registration Defaults described in clauses (i), (ii) and (iii) of
subsection (a).
(c) In the event that a Shelf Registration
Statement is declared effective, if the Company fails to keep such Registration
Statement continuously effective (except as permitted under Section 3(b)) for
the Shelf Registration Period, then from such time as the Shelf Registration
Statement is no longer effective until the earlier of
(i) the date that the Shelf Registration Statement
is again deemed effective and
(ii) the date that is the earliest of (x) the second
anniversary of the date of original issuance of the Securities (or
until the first anniversary of the effective date of the Shelf
Registration Statement is filed at the request of the Initial
Purchasers), (y) the time when the Securities registered thereunder
can be sold by non-affiliates pursuant to Rule 144 under the
Securities Act without any limitation under clauses (c), (e), (f) and
(h) of Rule 144, or (z) the date as of which all such Securities are
sold pursuant to the Shelf Registration Statement,
Additional Interest shall accrue at a rate per annum equal to 0.25% of the
principal amount of the Securities which, except as otherwise provided herein,
shall be the sole and exclusive remedy for such Registration Default.
(d) Any amounts of Additional Interest due
pursuant to clause (a)(i), (a)(ii), (a)(iii) or (c) of this Section 5 will be
payable in cash semiannually in arrears on the regular interest payment dates
with respect to the
<PAGE>
24
Securities. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount
of the Securities, 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.
(e) Notwithstanding anything to the contrary
contained in this Agreement, it is hereby acknowledged and agreed that the
Company will have no other liabilities for monetary damages to the Initial
Purchasers or any Holder for any breaches, failures to comply or violations by
it of Sections 3 and 4 hereof; PROVIDED, HOWEVER, that in the event the Company
breaches, fails to comply with or violates certain provisions of this Agreement,
the holders shall be entitled to, and the Company shall not oppose the granting
of, equitable relief, including injunction and specific performance.
8. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of
the date hereof, entered into, nor shall it, on or after the date
hereof, enter into, any agreement with respect to its Securities that
is inconsistent with the rights granted to the Holders herein or
otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, qualified, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the
Holders of at least a majority of the then outstanding aggregate
principal amount of Securities (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of New
Securities); PROVIDED that, with respect to any matter that directly
or indirectly affects the rights of any Initial Purchaser hereunder,
the Company shall obtain the written consent of each such Initial
Purchaser against which such amendment, qualification, supplement,
waiver or consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to departure
<PAGE>
25
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose Securities are being sold
pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the
Majority Holders, determined on the basis of Securities being sold
rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(i) 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(c), which address initially
is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a
copy in like manner to Salomon Brothers Inc as follows;
Salomon Brothers Inc.
Seven World Trade Center
New York, NY 10048
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.
(ii) if to the Initial Purchasers, initially at
the addresses set forth above; and
(iii) if to the Company, at its address as
follows:
SEACOR SMIT Inc.
1370 Avenue of the Americas
25th Floor
New York, NY 10019
<PAGE>
26
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.
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..
The Initial Purchasers or the Company by notice to
the other may designate additional or different addresses
for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each
of the parties, including, without the need for an express assignment
or any consent by the Company thereto, subsequent Holders of
Securities and/or New Securities. The Company hereby agrees to extend
the benefits of this Agreement to any Holder of Securities and/or New
Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the
<PAGE>
27
internal laws of the State of New York without regard to principles
of conflicts of laws.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by
law.
(i) Securities Held by the Company, etc. Whenever the
consent or approval of Holders of a specified percentage of principal
amount of Securities or New Securities is required hereunder,
Securities or New Securities, as applicable, held by the Company or
its Affiliates (other than subsequent Holders of Securities or New
Securities if such subsequent Holders are deemed to be Affiliates
solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
<PAGE>
28
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 SMIT 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.
SALOMON BROTHERS INC
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: SALOMON BROTHERS INC
By: /s/ Mark Renton
-----------------------
Name: Mark Renton
Title: Director
<PAGE>
ANNEX A
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Securities received in exchange for Securities where such
New Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date (as defined herein) and ending on the close of business on
the 180th day following the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
<PAGE>
ANNEX B
Each broker-dealer that receives New Securities for its own account
in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Securities received in exchange
for Securities where such Securities were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date and ending on the close of business on the 180th day
following the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until , 199 , all dealers effecting transactions in
the Exchange Securities may be required to deliver a prospectus.
*/
The Company will not receive any proceeds from any
sale of New Securities by broker-dealers. New Securities
received by broker-dealers for their own account pursuant to
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the New Securities or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Securities. Any
broker-dealer that resells New Securities that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
- ---------------
* In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
<PAGE>
2
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation
S-K Items 507 and/or 508.]
<PAGE>
ANNEX D
Rider A
-------
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
Name:_________________________________________________
Address:______________________________________________
------------------------------------------------------
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of New Securities. If the undersigned is a broker-dealer that will
receive New Securities for its own account in exchange for Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT 5
WEIL, GOTSHAL & MANGES LLP
A Limited Liability Partnership Including Professional Corporations
767 Fifth Avenue
New York, NY 10153
212 310-8000
Fax: 212 310-8007
October 27, 1997
SEACOR SMIT Inc.
1370 Avenue of the Americas, 25th Floor
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel to SEACOR SMIT Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of the Company's Registration Statement
on Form S-4 (as amended, the "Registration Statement") under the Securities Act
of 1933, as amended, relating to $150,000,000 principal amount of the Company's
7.20% Senior Notes due 2009 (the "Exchange Notes").
In so acting, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of the Registration Statement, the
Indenture dated as of September 22, 1997, between the Company and First Trust
National Association, as trustee (the "Trustee"), pursuant to which the Exchange
Notes will be issued (the "Indenture"), the form of the Exchange Notes included
within Exhibit 4.1 to the Registration Statement and such corporate records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinion hereinafter set
forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to
<PAGE>
SEACOR SMIT Inc.
October 27, 1997
Page 2
all questions of fact material to this opinion that have not been independently
established, we have relied upon certificates or comparable documents of
officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that the Exchange Notes are duly
authorized, and, when duly executed on behalf of the Company, authenticated by
the Trustee and delivered in accordance with the terms of the Indenture and as
contemplated by the Registration Statement, will constitute legal, valid and
binding obligations of the Company, enforceable against it in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
The opinion expressed herein is limited to the laws of the
State of New York, the corporate laws of the State of Delaware and the federal
laws of the United States, and we express no opinion as to the effect on the
matters covered by this letter of the laws of any other jurisdiction.
The opinion expressed herein is rendered solely for your
benefit in connection with the transactions described herein. This opinion may
not be used or relied upon by any other person, nor may this letter or any
copies thereof be furnished to a third party, filed with a governmental agency,
quoted, cited or otherwise referred to without our prior written consent, except
that we hereby consent to the use of this letter as an exhibit to the
Registration Statement. We further consent to the reference to our name under
the caption "Legal Matters" in the prospectus which is a part of the
Registration Statement.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 12
SEACOR SMIT INC. AND SUBSIDIARIES
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES AND EBITDA TO FIXED
CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------ ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PRO FORMA PRO FORMA
1992 1993 1994 1995 1996 1996 1996 1996 1997
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Pretax Income from
continuing
operations............ $ 1,602 $ 15,311 $ 12,536 $ 15,642 $ 51,968 $ 55,862 $ 19,856 $ 21,927 $ 100,085
Add:
Minority Interest before
income taxes.......... -- (77) -- -- -- -- -- -- --
Interest expense........ 7,044 4,782 5,422 6,681 5,713 13,426 3,452 7,266 5,641
Amortized debt
expense............... 724 379 323 449 196 196 246 246 48
Interest factor in
rent.................. 22 32 35 41 58 58 26 26 69
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Earnings available for
fixed charges......... $ 9,392 $ 20,427 $ 18,316 $ 22,813 $ 57,935 $ 69,542 $ 23,580 $ 29,465 $ 105,843
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Interest expense.... $ 7,044 $ 4,782 $ 5,422 $ 6,681 $ 5,713 $ 13,426 $ 3,452 $ 7,266 $ 5,641
Capitalized
Interest.......... -- -- -- -- -- -- -- -- 564
Amortized debt
expenses.............. 724 379 323 449 196 196 246 246 48
Interest factor in
rent.................. 22 32 35 41 58 58 26 26 69
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Fixed charges........... $ 7,790 $ 5,193 $ 5,780 $ 7,171 $ 5,967 $ 13,680 $ 3,724 $ 7,538 $ 6,322
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Ratio of earnings to
fixed charges......... 1.21 3.93 3.17 3.18 9.71 5.08 6.33 3.91 16.74
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
EBITDA.................. $ 24,570 $ 32,366 $ 32,923 $ 35,964 $ 79,730 $ 99,620 $ 34,291 $ 44,318 $ 74,094
Certain fixed charges:
Interest expense........ $ 7,044 $ 4,782 $ 5,422 $ 6,681 $ 5,713 $ 13,426 $ 3,452 $ 7,266 $ 5,641
Capitalized Interest.... -- -- -- -- -- -- -- -- 564
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
$ 7,044 $ 4,782 $ 5,422 $ 6,681 $ 5,713 $ 13,426 $ 3,452 $ 7,266 $ 6,205
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
Ratio of EBITDA to
certain fixed
charges............... 3.49 6.77 6.07 5.38 13.96 7.42 9.93 6.10 11.94
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
--------- --------- --------- --------- --------- ----------- --------- ----------- ----------
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 19, 1997
included in the company's Form 10-K for the year ended December 31, 1996, and to
all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
New Orleans, Louisiana
October 27, 1997
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST TRUST NATIONAL ASSOCIATION
- --------------------------------------------------------------------------------
(Exact name of Trustee as specified in its charter)
United States 41-0257700
- ------------------------------ ---------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
- ---------------------------------------- ---------------------
(Address of Principal Executive Offices) (Zip Code)
SEACOR SMIT INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3542736
- -------------------------- ------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
11200 Westheimer Suite 850
Houston, Texas 77042
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
7.20% SENIOR NOTES DUE 2004 (SERIES B)
- --------------------------------------------------------------------------------
(Title of the Indenture Securities)
<PAGE>
GENERAL
1. General Information
Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority is incorporated by reference to Registration
Number 333-34585.
* Incorporated by reference to Registration Number 22-27000.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 16th day of October,
1997.
FIRST TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
----------------------------
Richard H. Prokosch
Trust Officer
/s/ Kathe M Barrett
- ---------------------
Kathe M Barrett
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: October 16, 1997
FIRST TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
--------------------------------
Richard H. Prokosch
Trust Officer
<PAGE>
LETTER OF TRANSMITTAL
SEACOR SMIT INC.
OFFER TO EXCHANGE ITS 7.20% SENIOR NOTES DUE 2009, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("EXCHANGE NOTES") FOR ANY AND ALL OF ITS OUTSTANDING 7.20% SENIOR NOTES
DUE 2009, WHICH HAVE
NOT BEEN SO REGISTERED ("EXISTING NOTES"), PURSUANT TO THE PROSPECTUS DATED
, 199 .
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
OR SUCH LATER DATE AND TIME TO WHICH THE EXCHANGE OFFER MAY
BE EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO THE
EXPIRATION DATE.
To:
First Trust National Association, Exchange Agent
<TABLE>
<S> <C>
BY MAIL: BY FACSIMILE:
First Trust National Association (612) 244-1537
180 East Fifth Street (For Eligible Institutions Only)
St. Paul, Minnesota 55101
Attention: Therese Linscheid
Specialized Finance
</TABLE>
<TABLE>
<S> <C> <C>
BY OVERNIGHT COURIER OR
BY HAND AFTER 4:30 P.M.: BY HAND TO 4:30 P.M.:
180 East Fifth Street 180 East Fifth Street First Trust New York
4th Floor--Bond Drop Window 4th Floor--Bond Drop Window 100 Wall Street
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101 20th Floor
Attention: Therese Linscheid Attention: Therese Linscheid New York, New York 10005
Specialized Finance Specialized Finance
</TABLE>
FOR INFORMATION CALL:
(612) 244-1234
--------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING
ANY BOX BELOW.
List below the Existing Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, the certificate number(s) and
aggregate principal of Existing Notes should be listed on a separate signed
schedule affixed thereto.
<TABLE>
<S> <C> <C> <C> <C>
DESCRIPTION OF EXISTING NOTES TENDERED
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S),
EXACTLY AS NAME(S) APPEAR(S) ON EXISTING NOTES
CERTIFICATE (PLEASE FILL IN, IF BLANK) (1) (2) (3) (4)
<S> <C> <C> <C> <C>
<CAPTION>
AGGREGATE
PRINCIPAL
AMOUNT OF
EXISTING
NOTES
AGGREGATE TENDERED IN
CERTIFICATE PRINCIPAL EXCHANGE
NUMBER(S) AMOUNT AGGREGATE FOR
OF REPRESENTED PRINCIPAL CERTIFICATED
EXISTING BY AMOUNT EXCHANGE
NOTES* CERTIFICATE(S) TENDERED** NOTES***
<S> <C> <C> <C> <C>
</TABLE>
* Need not be completed if Existing Notes are being tendered by book-entry
transfer in accordance with DTC's (as defined) ATOP (as defined) procedures
for transfer.
** Unless otherwise indicated in this column, the aggregate principal amount
represented by ALL Existing Notes Certificates identified in Column 1 or
delivered to the Exchange Agent shall be deemed tendered.
*** Unless otherwise indicated, the holder will be deemed to have tendered
Existing Notes in exchange for a beneficial interest in one or more fully
registered global certificates, which will be deposited with, or on behalf
of, Depository Trust Company ("DTC") and registered in the name of Cede &
Co., its nominee.
<PAGE>
The undersigned acknowledges that he, she or it has received and reviewed
the Prospectus, dated , 19 (the "Prospectus"), of SEACOR SMIT Inc.,
a Delaware corporation (the "Company"), and this Letter of Transmittal (the
"Letter of Transmittal"), which together constitute the Company's offer (the
"Exchange Offer") to exchange its 7.20% Senior Notes due 2009, which have been
registered under the Securities Act (the "Exchange Notes") for an equal
principal amount of its 7.20% Senior Notes due 2009 which have not been so
registered (the "Existing Notes"). The Exchange Notes and the Existing Notes are
collectively referred to as the "Notes." Capitalized terms used but not defined
herein have the meanings ascribed to them in the Prospectus.
The undersigned has completed the appropriate boxes above and below and
signed this Letter of Transmittal to indicate the action the undersigned desires
to take with respect to the Exchange Offer.
This Letter of Transmittal is to be used by holders of Existing Notes to
accept the Exchange Offer if: (i) tender of Existing Notes is to be made
according to the Automated Tender Offer Program ("ATOP") of Depository Trust
Company ("DTC"), for which the transaction is eligible, pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering--Existing Notes held through DTC"; (ii)
certificates representing Existing Notes are to be physically delivered to the
Exchange Agent herewith by such holders, pursuant to the procedures set forth in
the Prospectus under the caption "The Exchange Offer--Procedures for
Tendering--Existing Notes held by Holders"; or (iii) tender of Existing Notes is
to be made according to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures." NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE
EXCHANGE OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A "DTC PARTICIPANT")
TENDERING EXISTING NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN
AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE.
ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO
DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A
BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S
MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC
PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL
AND AGREE TO BE BOUND BY ITS TERMS AND THE COMPANY WILL BE ABLE TO ENFORCE SUCH
AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
DTC Participants who wish to cause their Existing Notes to be tendered, but
who cannot transmit their acceptances through ATOP prior to the Expiration Date,
may effect a tender in accordance with the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer-- Guaranteed
Delivery Procedures--Existing Notes held through DTC." Holders who wish to
tender their Existing Notes but (i) whose Existing Notes are not immediately
available and will not be available for tendering prior to the Expiration Date,
or (ii) who cannot deliver their Existing Notes, the Letter of Transmittal, or
any other required documents to the Exchange Agent prior to the Expiration Date,
may effect a tender in accordance with the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures--Existing Notes held by Holders."
The undersigned must complete the appropriate boxes above and below and sign
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED TO THE EXCHANGE
AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE NOTES.
Unless the undersigned (i) has completed item (4) in the box entitled
"Description of Existing Notes Tendered" and (ii) has checked the box above, the
undersigned will be deemed to have tendered Existing Notes in exchange for a
beneficial interest in one or more fully registered global certificates, which
will be deposited with, or on behalf of, DTC and registered in the name of Cede
& Co., its nominee. Beneficial
2
<PAGE>
interests in such registered global certificates will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. See "Description of Exchange Notes--Book-Entry; Delivery and Form"
as set forth in the Prospectus.
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution___________________________________________________
The Depository Trust Company Account Number_____________________________________
Transaction Code Number_________________________________________________________
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED EXISTING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):________________________________________________
Window Ticket Number (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery:_____________________________
Name of Eligible Institution that Guaranteed Delivery:__________________________
If delivered by book-entry transfer:
Account Number______________________Transaction Code Number_____________________
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:___________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
3
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the Existing Notes indicated above.
Subject to, and effective upon, the acceptance for exchange of the Existing
Notes tendered hereby, the undersigned hereby sells, assigns and transfers to,
or upon the order of, the Exchange Agent, as agent of the Company, all right,
title and interest in and to such Existing Notes as are being tendered hereby,
and irrevocably constitutes and appoints the Exchange Agent as the agent and
attorney-in-fact of the undersigned to cause the Existing Notes tendered hereby
to be transferred and exchanged.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, sell, assign and transfer the Existing
Notes tendered hereby and to acquire the Exchange Notes issuable upon the
exchange of such tendered Existing Notes, and that the Exchange Agent, as agent
of the Company, will acquire good and unencumbered title thereto, free and clear
of all liens, restrictions, charges and encumbrances and not subject to any
adverse claim when the same are accepted by the Exchange Agent, as agent of the
Company. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company or the Exchange Agent to be necessary or
desirable to complete the exchange, sale, assignment and transfer of the
Existing Notes tendered hereby.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on the interpretation of the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1988) and similar no-action letters issued to third parties.
Based on such interpretation of the Staff of the SEC set forth in such no-action
letters, the Company believes that the Exchange Notes issued in exchange for the
Existing Notes pursuant to the Exchange Offer may be offered for resale, resold
and otherwise transferred by a holder thereof (other than (i) a broker-dealer
who purchases such Exchange Notes from the Company to resell pursuant to Rule
144A or any other available exemption under the Securities Act, or (ii) a person
that is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act")) without compliance
with the registration and prospectus delivery requirements of the Securities
Act, provided that (i) such Exchange Notes are acquired in the ordinary course
of such holder's business, (ii) at the time of the commencement of the Exchange
Offer such holder has no arrangement with any person to participate in a
distribution of the Exchange Notes, and (iii) such holder is not engaged in, and
does not intend to engage in, a distribution of the Exchange Notes. However, the
SEC has not considered the Exchange Offer in the context of a no-action letter
and there can be no assurance that the Staff of the SEC would make a similar
determination with respect to the Exchange Offer as in other circumstances. By
tendering Existing Notes in exchange for Exchange Notes, each holder will
represent to the Company that: (i) it is not such an affiliate of the Company,
(ii) any Exchange Notes to be received by it will be acquired in the ordinary
course of business, and (iii) at the time of the commencement of the Exchange
Offer it had no arrangement with any person to participate in a distribution of
the Exchange Notes.
If the undersigned is not a broker-dealer or is a broker-dealer but will not
receive Exchange Notes for its own account in exchange for Existing Notes, the
undersigned represents that it is not engaged in, and does not intend to engage
in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that
will receive Exchange Notes for its own account in exchange for Existing Notes,
where such Existing Notes were acquired as a result of market-making activities
or other trading activities, it acknowledges that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Nevertheless, a
broker-dealer may be deemed to be an "underwriter" under the Securities Act
notwithstanding such disclaimer. The SEC has taken the position that such
broker-dealers may fulfill their prospectus delivery requirements with respect
to the Exchange Notes (other than a resale of Exchange Notes received in
4
<PAGE>
exchange for an unsold allotment from the original sale of the Existing Notes)
with the Prospectus. The Prospectus, as it may be amended or supplemented from
time to time, may be used by such broker-dealers for a period of time, starting
on the Expiration Date and ending on the close of business 180 days after the
date of the Registration Statement relating to the Exchange Offer. The Company
has agreed that for such period of time, it will make the Prospectus (as it may
be amended or supplemented) available to each broker-dealer which exchanges
Existing Notes acquired for its own account as a result of market-making
activities or other trading activities for Exchange Notes pursuant to the
Exchange Offer (each a "Participating Broker-Dealer") for use in connection with
any resale of such Exchange Notes. By acceptance of the Exchange Offer, each
broker-dealer that receives Exchange Notes pursuant to the Exchange Offer hereby
acknowledges and agrees to notify the Company prior to using the Prospectus in
connection with the sale or transfer of Exchange Notes and that, upon receipt of
notice from the Company of the happening of any event which makes any statement
in the Prospectus untrue in any material respect or which requires the making of
any changes in the Prospectus in order to make the statements therein not
misleading, such broker-dealer will suspend use of the Prospectus until (i) the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission and (ii) either the Company has furnished copies of the amended or
supplemented Prospectus to such broker-dealer or, if the Company has not
otherwise agreed to furnish such copies and declines to do so after such
broker-dealer so requests, such broker-dealer has obtained a copy of such
amended or supplemented Prospectus as filed with the SEC. The Company agrees to
deliver such notice and such amended or supplemented Prospectus promptly to any
Participating Broker-Dealer that has so notified the Company. Except as
described above, the Prospectus may not be used for or in connection with an
offer to resell, a resale or any other retransfer of Exchange Notes.
The undersigned represents that (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of such holder's
business, (ii) such holder is not participating and has no arrangements with any
person to participate in the distribution of such Exchange Notes or, if such
holder intends to participate in the Exchange Offer for the purpose of
distributing the Exchange Notes, such holder will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable, and (iii) (x) such holder is not (a) a broker-dealer that will
receive Exchange Notes for its own account in exchange for Existing Notes that
were acquired as a result of market-making activities or other trading
activities, or (b) an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company or (y) if such holder is such a broker-dealer or an
affiliate, such holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
All authority conferred or agreed to be conferred in this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in the
instructions contained in this Letter of Transmittal.
The undersigned understands that tenders of the Existing Notes pursuant to
any one of the procedures described under "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company in accordance with the
terms and subject to the conditions of the Exchange Offer.
The undersigned understands that if its Existing Notes are accepted for
exchange, interest on the Exchange Notes will accumulate from the last interest
payment date on which interest was paid on the Existing Notes surrendered in
exchange therefor, or if no interest has been paid, from the original date of
issuance of the Existing Notes.
The undersigned recognizes that unless the holder of Existing Notes (i)
completes item (4) of the Box entitled "Description of Existing Notes Tendered"
above and (ii) checks the box entitled "Check here if tendered shares of
Existing Notes are being delivered to the Exchange Agent in exchange for
certificated
5
<PAGE>
Exchange Notes" above, such holder, when tendering such shares of Existing
Notes, will be deemed to have tendered such Existing Notes in exchange for a
beneficial interest in one or more fully registered global certificates, which
will be deposited with, or on behalf of, DTC and registered in the name of Cede
& Co., its nominee. Beneficial interests in such registered global certificates
will be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. See "Description of Exchange
Notes--Book-Entry; Delivery and Form" in the Prospectus.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus under "The Exchange Offer--Conditions," the Company may not be
required to accept for exchange any of the Existing Notes tendered. Existing
Notes not accepted for exchange or withdrawn will be returned to the undersigned
at the address set forth below unless otherwise indicated under "Special
Delivery Instructions" below.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptability of any tender will be determined by the Company, in
its sole discretion, and such determination will be final and binding. Unless
waived by the Company, irregularities and defects must be cured by the
Expiration Date. The Company shall not be obligated to give notice of any
defects or irregularities in tenders and shall not incur any liability for
failure to give any such notice.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby requests that the Exchange Notes
(and, if applicable, substitute certificates representing Existing Notes for any
Existing Notes not exchanged) be issued in the name of the undersigned.
Similarly, unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, the undersigned hereby requests that the Exchange Notes
(and, if applicable, substitute certificates representing Existing Notes for any
Existing Notes not exchanged) be sent to the undersigned at the address shown
above in the box entitled "Description of Existing Notes Tendered."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF EXISTING
NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED
THE EXISTING NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
<TABLE>
<S> <C>
X
X
SIGNATURE(S) OF OWNER(S) DATE
</TABLE>
Area Code and Telephone Number: ________________________________________________
If a holder is tendering any Existing Notes, this Letter of Transmittal must be
signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Existing Notes or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or other
person acting in a fiduciary or representative capacity, please set forth full
title below. See Instruction 3.
Name(s): _______________________________________________________________________
________________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: ______________________________________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: _______________________________________________________
(AUTHORIZED SIGNATURE)
________________________________________________________________________________
(TITLE)
________________________________________________________________________________
(NAME OF FIRM)
Dated: _________________________________________________________________________
7
<PAGE>
<TABLE>
<S> <C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4) (SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if Exchange Notes To be completed ONLY if certificates for
(and, if applicable, substitute Exchange Notes (and, if applicable,
certificates representing Existing Notes substitute certificates representing
for any Existing Notes not exchanged) are Existing Notes for any Existing Notes not
to be issued in the name of and sent to exchanged) are to be sent to someone other
someone other than the person or persons than the person or persons whose
whose signature(s) appear(s) on this signature(s) appear(s) on this Letter of
Letter of Transmittal above. Transmittal above or to such person or
persons at an address other than shown in
the box entitled "Description of Existing
Notes Tendered" on this Letter of
Transmittal above.
Issue Exchange Notes to: Mail Exchange Notes to:
Name(s): Name(s):
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)
Address: Address:
(ZIP CODE) (ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
</TABLE>
IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE
HEREOF) TOGETHER WITH CERTIFICATES REPRESENTING EXISTING NOTES OR (B) A
BOOK-ENTRY CONFIRMATION, INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING
HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY
TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF
THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
8
<PAGE>
<TABLE>
<S> <C> <C>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: SEACOR SMIT INC.
------------------------------------
SUBSTITUTE PART I--TAXPAYER IDENTIFICATION NUMBER Social Security Number
FORM W-9 Enter your taxpayer identification OR
number in the appropriate box. For
most individuals, this is your social
security number. If you do not have a
number, see how to obtain a "TIN" in
the enclosed Guidelines.
DEPARTMENT OF THE NOTE: If the account is in more than
TREASURY INTERNAL one name, see the chart on page 2 of ------------------------------------
REVENUE SERVICE the enclosed Guidelines to determine Employer Identification Number
what number to give.
</TABLE>
<TABLE>
<S> <C> <C>
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See
enclosed Guidelines)
Certification under the penalties of perjury, I certify that:
PAYOR'S REQUEST FOR TAXPAYER (1) The number shown on this form is my correct Taxpayer PART III--AWAITING TIN
IDENTIFICATION NUMBER ("TIN") Identification Number (or I am waiting for a number to be
AND CERTIFICATION issued to me), and (2) I am not subject to backup withholding / /
either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends or the IRS has notified me that I am no longer
subject to backup withholding.
SIGNATURE -------------------------------------------------------------------------------
DATE -------------------------------------------------------------------------------------
CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification if you have
been notified by the IRS that you are subject to backup withholding because of underreporting
of interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2).
</TABLE>
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number
has not been issued to me, and that I mailed or delivered an application to
receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31 percent of all
payments made to me on account of the Exchange Notes shall be retained until I
provide a Taxpayer Identification Number to the payer and that, if I do not
provide my Taxpayer Identification Number within sixty (60) days, such retained
amounts shall be remitted to the Internal Revenue Service as backup withholding
and 31 percent of all reportable payments made to me thereafter will be withheld
and remitted to the Internal Revenue Service until I provide a Taxpayer
Identification Number.
Signature
- -------------------------------------------------- Date
- ---------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE
NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
9
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND EXISTING NOTES; GUARANTEED
DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by holders of
Existing Notes to accept the Exchange Offer if: (i) tendering holders are not
ATOP members; (ii) tendering holders are ATOP members but choose not to use
ATOP; (iii) certificates representing Existing Notes are to be physically
delivered to the Exchange Agent herewith by such holders, pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering--Existing Notes held by Holders"; or (iv) tender
of Existing Notes is to be made according to the guaranteed delivery procedures
set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures." Existing Notes tendered must be in denominations of
principal amount at maturity of $1,000 or any integral multiples thereof.
NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE
OFFER MAY BE EFFECTED BY A DTC PARTICIPANT TENDERING EXISTING NOTES THROUGH ATOP
WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE PRIOR TO THE EXPIRATION
DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS
ACCEPTANCE TO DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE
ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC
AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY
TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF
THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE COMPANY
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
In order to validly tender Existing Notes pursuant to the Exchange Offer,
either (i) (A) this Letter of Transmittal, or a facsimile hereof, together with
certificates representing Existing Notes or (B) a Book-Entry Confirmation (as
defined in the Prospectus), including by means of an Agent's Message, of the
transfer into the Exchange Agent's account at DTC of all Existing Notes
delivered electronically must be received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date,
together with all other required documents, or (ii) the tendering holder must
comply with the guaranteed delivery procedures set forth below. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
If a holder or DTC Participant desires to tender Existing Notes pursuant to
the Exchange Offer and time will not permit this Letter of Transmittal,
certificates representing such Existing Notes and all other required documents
to reach the Exchange Agent, or the procedures for book-entry transfer,
including those with respect to tenders through ATOP, cannot be completed, prior
to the Expiration Date, such holder or DTC Participant, as the case may be, must
tender such Existing Notes pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer-- Procedures for
Tendering--Guaranteed Delivery Procedures." Pursuant to such procedures (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Company, must be received by the Exchange Agent either by
hand delivery, mail, facsimile transmission or overnight courier, prior to the
Expiration Date; and (iii) within three NYSE trading days after the date of the
execution of the Notice of Guaranteed Delivery, (A) holders must deliver to the
Exchange Agent a properly completed and duly executed Letter of Transmittal as
well as the certificate(s) representing all tendered Existing Notes in proper
form for transfer, and all other documents required by the Letter of Transmittal
or (B) DTC Participants must effect a Book-Entry Confirmation, including through
ATOP by means of an Agent's Message, of the transfer of such Existing Notes into
the Exchange Agent's account at DTC as set forth in the Prospectus.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE EXISTING NOTES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE
OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE
TENDERING HOLDER. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed for
10
<PAGE>
such documents to reach the Exchange Agent prior to the Expiration Date. Except
as otherwise provided in this Instruction 1, delivery will be deemed made only
when actually received by the Exchange Agent.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of this Letter of Transmittal (or a facsimile
hereof), waive any right to receive any notice of the acceptance of their
Existing Notes for exchange.
See "The Exchange Offer" in the Prospectus.
2. WITHDRAWALS. Tenders of Existing Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal
of a tender of Existing Notes to be effective, a letter, telex, telegram or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth above prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal by a DTC Participant must
contain the name and number of the DTC Participant, the principal amount due at
the stated maturity of Existing Notes to which such withdrawal relates and the
signature of the DTC Participant. Any such notice of withdrawal by a holder of
Existing Notes must (i) specify the name of the person who tendered the Existing
Notes to be withdrawn, (ii) contain a description of the Existing Notes to be
withdrawn (including the certificate number or numbers and principal amount due
at the stated maturity of such Existing Notes) and (iii) be signed by the holder
of such Existing Notes in the same manner as the original signature on this
Letter of Transmittal (including any required signature guaranties), or be
accompanied by (x) documents of transfer in a form acceptable to the Company, in
its sole discretion and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such holder. Any
Existing Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Existing Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender, or termination of the
Exchange Offer. Properly withdrawn Existing Notes may be retendered by following
the procedures described above at any time on or prior to 5:00 p.m., New York
City time, on the Expiration Date.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder of the Existing Notes tendered hereby, the signature must
correspond exactly with the name as written on the face of the certificates
without any change whatsoever.
If any tendered Existing Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Existing Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any Existing Notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should indicate such capacity when signing, and unless
waived by the Company, proper evidence satisfactory to the Company of their
authority so to act must be submitted.
The signatures on this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed unless the Existing Notes surrendered for
exchange pursuant thereto are tendered (i) by a registered holder of the
Existing Notes who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in this Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that the
signatures in this Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantees must be by a firm which
is a member of a registered national securities exchange or a member of the
National Association of Securities Dealers,
11
<PAGE>
Inc., or by a commercial bank or trust company having an office or correspondent
in the United States, or an "eligible guarantor institution" within the meaning
of Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended (each an
"Eligible Institution").
If Existing Notes are registered in the name of a person other than the
signer of this Letter of Transmittal, the Existing Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered holder with the
signature thereon guaranteed by an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of
Existing Notes should indicate in the applicable box the name and address to
which Exchange Notes issued pursuant to the Exchange Offer are to be issued or
sent, if different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. If no such instructions are given, any Exchange Notes will be issued
in the name of, and delivered to, the name or address of the person signing this
Letter of Transmittal and any Existing Notes not accepted for exchange will be
returned to the name or address of the person signing this Letter of
Transmittal.
5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under
the federal income tax laws, payments that may be made by the Company on account
of Exchange Notes issued pursuant to the Exchange Offer may be subject to backup
withholding at the rate of 31%. In order to avoid such backup withholding, each
tendering holder should complete and sign the Substitute Form W-9 included in
this Letter of Transmittal and either (a) provide the correct taxpayer
identification number ("TIN") and certify, under penalties of perjury, that the
TIN provided is correct and that (i) the holder has not been notified by the
Internal Revenue Service (the "IRS") that the holder is subject to backup
withholding as a result of failure to report all interest or dividends or (ii)
the IRS has notified the holder that the holder is no longer subject to backup
withholding; or (b) provide an adequate basis for exemption. If the tendering
holder has not been issued a TIN and has applied for one, or intends to apply
for one in the near future, such holder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I, the Company (or
the Transfer Agent with respect to the Exchange Notes or a broker or custodian)
may still withhold 31% of the amount of any payments made on account of the
Exchange Notes until the holder furnishes the Company or the Transfer Agent with
respect to the Exchange Notes, broker or custodian with its TIN. In general, if
a holder is an individual, the taxpayer identification number is the Social
Security number of such individual. If the Exchange Agent or the Company is not
provided with the correct TIN, the holder may be subject to a $50 penalty
imposed by the IRS. Certain holders (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such holder must submit a statement (generally, IRS Form W-8),
signed under penalties of perjury, attesting to that individual's exempt status.
Such statements can be obtained from the Exchange Agent. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a taxpayer identification number if you do not
have one and how to complete the Substitute Form W-9 if Existing Notes are
registered in more than one name), consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause the
Existing Notes to be deemed invalidly tendered, but may require the Company or
the Transfer Agent with respect to the Exchange Notes, broker or custodian to
withhold 31% of the amount of any payments made on account of the Exchange
Notes. Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the IRS.
12
<PAGE>
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the transfer of Existing Notes to it or its order pursuant to the
Exchange Offer. If, however, Exchange Notes and/or substitute Existing Notes not
exchanged are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Existing Notes tendered
hereby, or if tendered Existing Notes are registered in the name of any person
other than the person signing this Letter of Transmittal, or if a transfer tax
is imposed for any reason other than the transfer of Existing Notes to the
Company or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other person)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Existing Notes specified in this Letter
of Transmittal.
7. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Existing Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Existing Notes for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. INADEQUATE SPACE. If the space provided herein is inadequate, the
aggregate principal amount of Existing Notes being tendered and the certificate
number or numbers (if available) should be listed on a separate schedule
attached hereto and separately signed by all parties required to sign this
Letter of Transmittal.
10. MUTILATED, LOST, STOLEN OR DESTROYED EXISTING NOTES. Any holder whose
Existing Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to
the procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone number indicated above.
13
<PAGE>
SEACOR SMIT INC.
All tendered Existing Notes, executed Letters of Transmittal and other
related documents should be directed to the Exchange Agent. Requests for
assistance and additional copies of the Prospectus, the Letter of Transmittal
and other related documents should be directed to the Exchange Agent.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
FIRST TRUST NATIONAL ASSOCIATION
BY FACSIMILE:
(612) 244-1537
(For Eligible Institutions Only)
BY TELEPHONE:
(612) 244-1234
BY MAIL:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: Therese Linscheid
Specialized Finance
BY HAND TO 4:30 P.M.:
First Trust National Association
180 East Fifth Street
4th Floor--Bond Drop Window
St. Paul, Minnesota 55101
Attn: Therese Linscheid
Specialized Finance
First Trust New York
100 Wall Street
20th Floor
New York, New York 10005
BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.:
First Trust National Association
180 East Fifth Street
4th Floor--Bond Drop Window
St. Paul, Minnesota 55101
Attn: Therese Linscheid
Specialized Finance
14
<PAGE>
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
SEACOR SMIT INC.
7.20% SENIOR NOTES DUE 2009
This form or a form substantially similar hereto must be used by a holder of
7.20% Senior Notes Due 2009 (the "Existing Notes") of SEACOR SMIT Inc., a
Delaware corporation ("SEACOR"), that wishes to tender Existing Notes to the
Exchange Agent pursuant to the guaranteed delivery procedures described in "The
Exchange Offer--Guaranteed Delivery Procedures" of the Prospectus dated
(the "Prospectus") and in Instruction 1 to the accompanying
Letter of Transmittal. Any holder that wishes to tender Existing Notes pursuant
to such guaranteed delivery procedures must ensure that the Exchange Agent
receives this Notice of Guaranteed Delivery prior to 5:00 p.m., New York City
time, on the Expiration Date of the Exchange Offer. Capitalized terms not
defined herein have the meaning ascribed to them in the Prospectus or the Letter
of Transmittal.
<TABLE>
<S> <C>
TO: First Trust National Association, Exchange Agent
BY MAIL: BY FACSIMILE:
First Trust National Association (612) 244-1532
180 East Fifth Street (For Eligible Institutions Only)
St. Paul, Minnesota 55101
Attention: Therese Linscheid
Specialized Finance
</TABLE>
<TABLE>
<S> <C> <C>
BY OVERNIGHT COURIER OR BY
HAND
TO 4:30 P.M.: BY HAND AFTER 4:30 P.M.:
First Trust National First Trust National First Trust New York
Association Association 100 Wall Street
180 East Fifth Street 180 East Fifth Street 20th Floor
4th Floor--Bond Drop Window 4th Floor--Bond Drop Window New York, New York 10005
St. Paul, Minnesota 55101 St. Paul, Minnesota 55101
Attention: Therese Linscheid Attention: Therese Linscheid
Specialized Finance Specialized Finance
FOR INFORMATION CALL:
(612) 244-1234
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Please read the accompanying instructions carefully.
Ladies and Gentlemen:
The undersigned hereby tenders to SEACOR, upon the terms and subject to the
conditions set forth in the Prospectus and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the aggregate principal amount of
Existing Notes specified below pursuant to the guaranteed delivery procedures
set forth in the Prospectus and in Instruction 1 of the Letter of Transmittal.
The undersigned hereby tenders the Existing Notes listed below:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CERTIFICATE NUMBER(S) (IF
KNOWN) OF
EXISTING NOTES OR AGGREGATE PRINCIPAL AMOUNT AGGREGATE PRINCIPAL
ACCOUNT NUMBER AT THE OF EXISTING NOTES REPRESENTED AMOUNT OF EXISTING NOTES
BOOK-ENTRY FACILITY BY CERTIFICATE TENDERED
</TABLE>
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
SIGN HERE
Name of Registered or Acting Holder: ___________________________________________
Signature(s): __________________________________________________________________
Name(s) (PLEASE PRINT): ________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
Telephone Number: ______________________________________________________________
Date: __________________________________________________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal
(or facsimile thereof), together with the Existing Notes tendered hereby in
proper form for transfer (or confirmation of the book-entry transfers of such
Existing Notes into the Exchange Agent's account at the book-entry transfer
facility described in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering" and in the Letter of Transmittal) and any other
required documents, within three New York Stock Exchange trading days after the
date of execution of the Notice of Guaranteed Delivery.
SIGN HERE
Name of Firm: __________________________________________________________________
Authorized Signature: __________________________________________________________
Name (PLEASE PRINT): ___________________________________________________________
________________________________________________________________________________
Telephone Number: ______________________________________________________________
Date: __________________________________________________________________________
2
<PAGE>
DO NOT SEND NOTES WITH THIS FORM. ACTUAL SURRENDER OF NOTES MUST BE MADE
(A) PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL
OR (B) IN ACCORDANCE WITH THE AUTOMATED TENDER OFFER PROGRAM OF
DEPOSITORY TRUST COMPANY.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other documents
required by this Notice of Guaranteed Delivery must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. The method of delivery of this Notice of Guaranteed
Delivery and any other required documents to the Exchange Agent is at the
election and risk of the holder and the delivery will be deemed made only when
actually received by the Exchange Agent. If delivery is by mail, registered or
certified mail properly insured, with return receipt requested, is recommended.
In all cases sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedure, see Instruction 1 of the
Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Existing Notes
referred to herein, the signature must correspond with the name(s) written on
the face of the Existing Notes without alteration, enlargement, or any change
whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of
the book-entry transfer facility whose name appears on a security position
listing as the owner of the Existing Notes, the signature must correspond with
the name shown on the security position listing as the owner of the Existing
Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Existing Notes or a participant of the book-entry
transfer facility whose name appears on the Existing Notes or is shown on the
book-entry transfer facility's security position listing, as applicable, this
Notice of Guaranteed Delivery must be accompanied by appropriate bond powers,
signed as the name of the registered holder(s) appears on the Existing Notes or
signed as the name of the participant shown on the book-entry transfer
facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing.
3. Requests for Assistance or Additional Copies. Questions and requests for
assistance and requests for additional copies of the Prospectus may be directed
to the Exchange Agent at the address specified in the Prospectus. Holders may
also contact their broker, dealer, commercial bank, trust company, or other
nominee for assistance concerning the Exchange Offer.
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