OCEANEERING INTERNATIONAL, INC.
$100,000,000 6.72% Senior Notes due September 8, 2010
______________
NOTE PURCHASE AGREEMENT
_____________
Dated as of September 1, 1998
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES...........................1
SECTION 2. SALE AND PURCHASE OF NOTES.......................1
SECTION 3. CLOSING..........................................2
SECTION 4. CONDITIONS TO CLOSING............................2
Section 4.1. Representations and Warranties ................2
Section 4.2. Performance; No Default. ......................2
Section 4.3. Compliance Certificates .......................2
Section 4.4. Opinions of Counsel ...........................3
Section 4.5. Purchase Permitted By Applicable Law,
Etc ...........................................3
Section 4.6. Sale of Other Notes ...........................3
Section 4.7. Payment of Special Counsel Fees. ..............3
Section 4.8. Private Placement Number ......................3
Section 4.9. Changes in Corporate Structure ................4
Section 4.10. Funding Instructions ..........................4
Section 4.11. Proceedings and Documents .....................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY..........................................4
Section 5.1. Organization; Power and Authority .............4
Section 5.2. Authorization, Etc ............................4
Section 5.3. Disclosure ....................................5
Section 5.4. Organization and Ownership of Shares
of Restricted Subsidiaries; Affiliates ........5
Section 5.5. Financial Statements ..........................6
Section 5.6. Compliance with Laws, Other
Instruments, Etc ..............................6
Section 5.7. Governmental Authorizations, Etc ..............7
Section 5.8. Litigation; Observance of Agreements,
Statutes and Orders ...........................7
Section 5.9. Taxes .........................................7
Section 5.10. Title to Property; Leases .....................7
Section 5.11. Licenses, Permits, Etc ........................8
Section 5.12. Compliance with ERISA .........................8
Section 5.13. Private Offering by the Company................9
Section 5.14. Use of Proceeds; Margin Regulations ...........9
Section 5.15. Existing Indebtedness; Future Liens ..........10
Section 5.16. Foreign Assets Control Regulations,
Etc ..........................................10
Section 5.17. Status under Certain Statutes ................10
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Section 5.18. Notes Rank Pari Passu ........................10
Section 5.19. Environmental Matters ........................10
SECTION 6. REPRESENTATIONS OF THE PURCHASER................11
Section 6.1. Purchase for Investment ......................11
Section 6.2. Source of Funds ..............................11
SECTION 7. INFORMATION AS TO THE COMPANY...................13
Section 7.1. Financial and Business Information ...........13
Section 7.2. Officer's Certificate.........................16
Section 7.3. Inspection ...................................17
SECTION 8. PREPAYMENT OF THE NOTES.........................18
Section 8.1. Required Prepayments .........................18
Section 8.2. Optional Prepayments with Make-Whole
Amount........................................18
Section 8.3. Change in Control ............................18
Section 8.4. Allocation of Partial Prepayments ............21
Section 8.5. Maturity; Surrender, Etc .....................21
Section 8.6. Purchase of Notes ............................22
Section 8.7. Make-Whole Amount ............................22
SECTION 9. AFFIRMATIVE COVENANTS...........................23
Section 9.1. Compliance with Law ..........................23
Section 9.2. Insurance ....................................24
Section 9.3. Maintenance of Properties ....................24
Section 9.4. Payment of Taxes and Claims ..................24
Section 9.5. Corporate Existence, Etc .....................25
Section 9.6. Notes to Rank Pari Passu .....................25
Section 9.7. NAIC Certificate .............................25
SECTION 10. NEGATIVE COVENANTS..............................25
Section 10.1. Consolidated Adjusted Net Worth ..............25
Section 10.2. EBITDA Interest Expense Coverage Ratio .......25
Section 10.3. Fixed Charges Coverage Ratio .................26
Section 10.4. Certain Indebtedness Ratios ..................26
Section 10.5. Limitations on Indebtedness and
Preferred Stock of Restricted
Subsidiaries .................................26
Section 10.6. Priority Liabilities .........................27
Section 10.7. Limitation on Liens ..........................28
Section 10.8. Dividends, Stock Purchases, Restricted
Investments ..................................31
Section 10.9. Mergers, Consolidations and Sales of
Assets .......................................33
Section 10.10.Limitations on Restricted Agreements..........38
Section 10.11.Nature of Business........................... 39
Section 10.12.Transactions with Affiliates..................39
Section 10.13.Designation of Subsidiaries...................39
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SECTION 11. EVENTS OF DEFAULT...............................41
SECTION 12. REMEDIES ON DEFAULT, ETC........................44
Section 12.1. Acceleration .................................44
Section 12.2. Other Remedies ...............................44
Section 12.3. Rescission ...................................45
Section 12.4. No Waivers or Election of Remedies,
Expenses, Etc ................................45
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES...........................................45
Section 13.1. Registration of Notes ........................45
Section 13.2. Transfer and Exchange of Notes ...............46
Section 13.3. Replacement of Notes .........................46
SECTION 14. PAYMENTS ON NOTES...............................47
Section 14.1. Place of Payment .............................47
Section 14.2. Home Office Payment ..........................47
SECTION 15. EXPENSES, ETC...................................47
Section 15.1. Transaction Expenses .........................47
Section 15.2. Survival .....................................48
SECTION 16. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE AGREEMENT....................48
SECTION 17. AMENDMENT AND WAIVER............................48
Section 17.1. Requirements .................................48
Section 17.2. Solicitation of Holders of Notes .............49
Section 17.3. Binding Effect, Etc ..........................49
Section 17.4. Notes Held by Company, Etc ...................49
SECTION 18. NOTICES.........................................50
SECTION 19. REPRODUCTION OF DOCUMENTS.......................50
SECTION 20. CONFIDENTIAL INFORMATION........................51
SECTION 21. SUBSTITUTION OF PURCHASER.......................52
SECTION 22. MISCELLANEOUS...................................52
Section 22.1. Successors and Assigns .......................52
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Section 22.2. Payments Due on Non-Business Days ............52
Section 22.3. Severability .................................52
Section 22.4. Construction .................................53
Section 22.5. Counterparts .................................53
Section 22.6. Governing Law.................................53
Signature................................................................54
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SCHEDULE A _ INFORMATION RELATING TO PURCHASERS
SCHEDULE B _ DEFINED TERMS
SCHEDULE C _ EXISTING INVESTMENTS
SCHEDULE 5.4 _ Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.5 _ Financial Statements
SCHEDULE 5.14 _ Use of Proceeds
SCHEDULE 5.15 _ Existing Indebtedness
SCHEDULE 8.3 _ Existing Affiliates
SCHEDULE 9.7 _ Form of NAIC Certificate
EXHIBIT 1 _ Form of 6.72% Senior Note due September 8,
2010
EXHIBIT 4.4(a) _ Form of Opinion of General Counsel for the
Company
EXHIBIT 4.4(b) _ Form of Opinion of Special Counsel for the
Company
EXHIBIT 4.4(c) _ Form of Opinion of Special Counsel for the
Purchasers
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OCEANEERING INTERNATIONAL, INC.
11911 FM 529
Houston, Texas 77041
6.72% Senior Notes due September 8, 2010
Dated as of September 1, 1998
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
OCEANEERING INTERNATIONAL, INC., a Delaware corporation (the
"Company" ), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
$100,000,000 aggregate principal amount of its 6.72% Senior Notes
due September 8, 2010 (the "Notes", such term to include any
such notes issued in substitution therefor pursuant toSection 13
of this Agreement or the Other Agreements (as hereinafter
defined)). The Notes shall be substantially in the form set out
in Exhibit 1, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used
in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to
a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at
the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the
other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder, and the
obligations of the Other Purchasers under the Other Agreements,
are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any
Person for the performance or nonperformance by any Other
Purchaser thereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you
and the Other Purchasers shall occur at the offices of Chapman
and Cutler, 111 West Monroe Street, Chicago, IL 60603, at 10:00
A.M. Chicago time, at a closing (the "Closing") on September 8,
1998. At the Closing the Company will deliver to you the Notes
to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as
you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to
account number 3880 0759 at Citibank Delaware, One Penn's Way,
New Castle, Delaware 19720, ABA #031100209. If at the Closing
the Company shall fail to tender such Notes to you as provided
above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations
under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. The
representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have
performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied
with by it prior to or at the Closing, and after giving effect to
the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Schedule 5.14), no Default or
Event of Default shall have occurred and be continuing. Neither
the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been
prohibited by Section 10 hereof had such Section applied since
such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
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(b) Secretary's Certificate. The Company shall have
delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and the
Agreements.
Section 4.4. Opinions of Counsel. You shall have received
opinions in form and substance satisfactory to you,dated the
date of the Closing (a) from George R. Haubenreich, Jr., Esq.,
General Counsel of the Company, covering the matters set forth in
Exhibit 4.4(a), (b) from Baker & Botts, L.L.P., counsel for the
Company, covering the matters set forth in Exhibit 4.4(b) and
covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such
opinion to you) and (c) from Chapman and Cutler, your special
counsel in connection with such transactions, substantially in
the form set forth in Exhibit 4.4(c) and covering such other
matters incident to such transactions as you may reasonably
request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the
date of the Closing your purchase of Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as
Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as
to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such
purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the
Other Purchasers shall purchase, the Notes to be purchased by
them at the Closing as specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting
the provisions of Section 15.1, the Company shall have paid on or
before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company
at least three Business Days prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement
Number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the National
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Association of Insurance Commissioners) shall have been obtained
for the Notes.
Section 4.9. Changes in Corporate Structure. The Company shall
not have changed its jurisdiction of incorporation or been a
party to any merger or consolidation and shall not have succeeded
to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5.
Section 4.10. Funding Instructions. At least three Business Days
prior to the date of the Closing, you shall have received written
instructions executed by a Responsible Officer of the Company
directing the manner of the payment of funds and setting forth
(1) the name and address of the transferee bank, (2) such
transferee bank's ABA number, (3) the account name and number
into which the purchase price for the Notes is to be deposited,
and (4) the name and telephone number of the account
representative responsible for verifying receipt of such funds.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such
transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all
such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform
the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other
Agreements and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this
Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by
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(a) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors'
rights generally and (b) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Chase
Securities, Inc., has delivered to you and each Other Purchaser a
copy of a Confidential Private Placement Offering Memorandum,
dated June 1, 1998 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the
business and principal properties of the Company and its
Subsidiaries. This Agreement, the Memorandum, the documents,
certificates or other writings delivered to you by or on behalf
of the Company in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken
as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances
under which they were made. Since March 31, 1998, there has been
no change in the financial condition, operations, business or
properties of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other
writings delivered to you by or on behalf of the Company
specifically for use in connection with the transactions
contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Restricted
Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as
noted therein) complete and correct lists (i) of the Company's
Restricted Subsidiaries, showing, as to each Restricted
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by
the Company and each other Restricted Subsidiary, (ii) of the
Company's Affiliates, other than Subsidiaries, and (iii) of the
Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or
similar equity interests of each Restricted Subsidiary shown in
Schedule 5.4 as being owned by the Company and its Restricted
Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Restricted
Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Restricted Subsidiary identified in Schedule 5.4 is
a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction
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of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Each such Restricted Subsidiary has the corporate or
other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact
the business it transacts and proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise
subject to, any legal restriction or any agreement (other than
this Agreement, the agreements listed on Schedule 5.4, customary
limitations imposed by corporate law statutes and other
limitations permitted by Section 10.10) restricting the ability
of such Subsidiary to pay dividends out of profits or make any
other similar distributions of profits to the Company or any of
its Restricted Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Restricted
Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to
each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said
financial statements (including in each case the related
schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such
financial statements and the consolidated results of their
operations and cash flows for the respective periods so specified
and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments and the inclusion of
abbreviated footnotes or exclusion thereof).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company or
any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which
the Company or any Restricted Subsidiary is bound or by which the
Company or any Restricted Subsidiary or any of their respective
properties may be bound or affected, (ii) conflict with or result
in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any
Restricted Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
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Section 5.7. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the
Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. (a) There are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any Restricted Subsidiary or any
property of the Company or any Restricted Subsidiary in any court
or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in
default under any term of any agreement or instrument to which it
is a party or by which it is bound, or any order, judgment,
decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental
Laws) of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries
have filed all tax returns that are required to have been filed
in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become
due and payable and before they have become delinquent, except
for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to
which the Company or a Restricted Subsidiary, as the case may be,
has established adequate reserves in accordance with GAAP. The
Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company
and its Restricted Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have
been determined by the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ended March 31,
1993.
Section 5.10. Title to Property; Leases. The Company and its
Restricted Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted
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Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material
respects.
Section 5.11. Licenses, Permits, Etc. (a) The Company and its
Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually
or in the aggregate are Material, without known conflict with the
rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit,
franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person;
and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or
any of its Restricted Subsidiaries with respect to any patent,
copyright, service mark, trademark, trade name or other right
owned or used by the Company or any of its Restricted
Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each
ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien
on any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets
of such Plan allocable to such benefit liabilities. The term
"benefit liabilities" has the meaning specified in Section 4001
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of ERISA and the terms "current value" and "present value"
have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under Section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the
aggregate are Material.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by Section 4980B
of the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant
to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of your
representation in Section 6.2 as to the sources of the funds used
to pay the purchase price of the Notes to be purchased by you.
Section 5.13. Private Offering by the Company. Neither the
Company nor anyone acting on its behalf has offered the Notes or
any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than you, the Other
Purchasers and not more than 80 other Institutional Investors,
each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company
will apply the proceeds of the sale of the Notes as set forth in
Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose
of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve
the Company in a violation of Regulation X of said Board (12 CFR
224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). The Company and its
Subsidiaries do not hold any margin stock and the Company does
not have any present intention of holding any margin stock. As
used in this Section, the terms _ margin stock_ and _purpose of
buying or carrying_ shall have the meanings assigned to them in
said Regulation U.
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Section 5.15. Existing Indebtedness; Future Liens.
(a) Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Restricted
Subsidiaries as of August 31, 1998, since which date there has
been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturity of the Indebtedness of
the Company or its Restricted Subsidiaries. Neither the Company
nor any Restricted Subsidiary is in default and no waiver of
default is currently in effect, in the payment of any principal
or interest on any Indebtedness of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Restricted Subsidiary that
would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the
Company nor any Restricted Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien, other than a Lien
permitted under Section 10.7(a) through (e) and (k).
Section 5.16. Foreign Assets Control Regulations, Etc. Neither
the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V,
as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company
nor any Restricted Subsidiary is an _ investment company_
registered or required to be registered subject to regulation
under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company
Act of 1935, as amended, the ICC Termination Act of 1995, as
amended, or the Federal Power Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the
Company under this Agreement and the Notes rank pari passu in
right of payment with all other senior unsecured Indebtedness
(actual or contingent) of the Company, including, without
limitation, all senior unsecured Indebtedness of the Company
described in Schedule 5.15 hereto.
Section 5.19. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received
any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Restricted
Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of
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any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Restricted Subsidiary
has knowledge of any facts which would give rise to any
claim, public or private, of violation of Environmental Laws
or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned,
leased or operated by any of them or to other assets or
their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse
Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any
of them or has disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in
any manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Restricted
Subsidiaries are in compliance with applicable Environmental
Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. You represent that you
are purchasing the Notes for your own account or for one or more
separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the
distribution thereof; provided that the disposition of your or
their property shall at all times be within your or their
control. You understand that the Notes have not been registered
under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under
circumstances where neither such registration nor such an
exemption is required by law, and that the Company is not
required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one
of the following statements is an accurate representation as to
each source of funds (a _ Source_) to be used by you to pay the
purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an _insurance company general
account_ within the meaning of Department of Labor
Prohibited Transaction Exemption (_ PTE_ ) 95-60 (issued
July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same
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employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for
all contracts held by or on behalf of such plan, exceed ten
percent (10%) of the total reserves and liabilities of such
general account (exclusive of separate account liabilities)
plus surplus, as set forth in the NAIC Annual Statement
filed with your state of domicile; or
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of PTE 90-1
(issued January 29, 1990), or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption)
managed by a "qualified professional asset manager" or
"QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the
assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part l(c) and (g) of
the QPAM Exemption are satisfied, neither the QPAM nor a
Person controlling or controlled by the QPAM (applying the
definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to
the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA.
If you or any subsequent transferee of the Notes indicates
that you or such transferee are relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall
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deliver on the date of Closing or on the date of transfer, as
applicable, a certificate, which shall state whether that (i) it
is a party in interest or a "disqualified person" (as defined
in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with
respect to any plan, identified pursuant to paragraph (c) above,
it or any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding
one year, exercised the authority to appoint or terminate said
QPAM as manager of any plan identified in writing pursuant to
paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan.
As used in this Section 6.2, the terms "employee benefit
plan", "governmental plan", "party in interest" and
"separate account" shall have the respective meanings assigned
to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company
shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements - within 60 days after the
end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of
each such fiscal year), duplicate copies of:
(i) (1) a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such
quarter and (2) a consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the end
of such quarter, and
(ii) (1) consolidated statements of income,
changes in shareholders' equity and cash flows of the
Company and its Subsidiaries for such quarter and (in
the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
and (2) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Restricted Subsidiaries for such quarter and (in
the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows, subject
to changes resulting from year-end adjustments; provided that
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delivery within the time period specified above of copies of the
Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1(a);
(b) Annual Statements _ within 105 days after the end
of each fiscal year of the Company, duplicate copies of,
(i) (1) a consolidated balance sheet of the
Company and its Subsidiaries, as at the end of such
year, and (2) a consolidated balance sheet of the
Company and its Restricted Subsidiaries, as at the end
of such year, and
(ii) (1) consolidated statements of income,
changes in shareholders' equity and cash flows of the
Company and its Subsidiaries, for such year, and (2)
consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Restricted Subsidiaries, for such year, setting forth
in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and accompanied by:
(1) an opinion thereon of independent
certified public accountants of recognized
national standing, which opinion shall state that
such financial statements present fairly, in all
material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared
in conformity with GAAP, and that the examination
of such accountants in connection with such
financial statements has been made in accordance
with generally accepted auditing standards, and
that such audit provides a reasonable basis for
such opinion in the circumstances, and
(2) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit,
they have become aware of any condition or event
that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the
nature and period of the existence thereof (it
being understood that such accountants shall not
be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of
Default unless such accountants should have
obtained knowledge thereof in making an audit in
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accordance with generally accepted auditing
standards or did not make such an audit),
provided that the delivery within the time period specified
above of the Company's Annual Report on Form 10-K for such
fiscal year prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission,
together with the accountant's certificate described in clause
(2) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC and Other Reports - promptly upon their
becoming available, one copy of (i) each financial statement
(including without limitation, the Company's annual report
to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act), report, notice or proxy statement
sent by the Company or any Subsidiary to public securities
holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and
all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission (but
excluding reports relating to registration statements for
employee benefit plans (S-8), shelf registration statements
(Rule 415) and annual reports for employee benefit plans
(Form 11-K)) and of all press releases and other statements
made available generally by the Company or any Subsidiary to
the public concerning developments that are Material;
(d) Notice of Default or Event of Default _ promptly,
and in any event within five days after a Responsible
Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company is
taking or proposes to take with respect thereto;
(e) ERISA Matters _ promptly, and in any event within
five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in Section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
-15-
proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of
the Code relating to the funding of employee benefit
plans, or in the imposition of any Lien on any of the
rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority - promptly,
and in any event within 30 days of receipt thereof, copies
of any notice to the Company or any Subsidiary from any
Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
and
(g) Requested Information _ with reasonable
promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets
or properties of the Company or any of its Restricted
Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as
from time to time may be reasonably requested by any such
holder of Notes, including without limitation, such
information as is required by SEC Rule 144A under the
Securities Act to be delivered to the prospective transferee
of the Notes.
Section 7.2. Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance _ the information (including
detailed calculations) required in order to establish
whether the Company was in compliance with the requirements
of Section 10.1 through Section 10.6 and Section 10.8 and
Section 10.9 hereof, inclusive, during the quarterly or
annual period covered by the statements then being furnished
(including with respect to each such Section, where
applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible
-16-
under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default _ a statement that such officer
has reviewed the relevant terms hereof and has made, or
caused to be made, under his or her supervision, a review of
the transactions and conditions of the Company and its
Restricted Subsidiaries from the beginning of the quarterly
or annual period covered by the statements then being
furnished to the date of the certificate and that such
review shall not have disclosed the existence during such
period of any condition or event that constitutes a Default
or an Event of Default or, if any such condition or event
existed or exists (including, without limitation, any such
event or condition resulting from the failure of the Company
or any Restricted Subsidiary to comply with any
Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional
Investor:
(a) No Default _ if no Default or Event of Default
then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and
(with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants,
and (with the consent of the Company, which consent will not
be unreasonably withheld) to visit the other offices and
properties of the Company and each Restricted Subsidiary,
all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default _ if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect
any of the offices or properties of the Company or any
Restricted Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their
respective officers and independent public accountants (and
by this provision the Company authorizes said accountants to
discuss the affairs, finances and accounts of the Company
and its Restricted Subsidiaries), all at such times and as
often as may be requested.
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SECTION 8. PREPAYMENT OF THE NOTES
Section 8.1. Required Prepayments. In addition to paying the
entire outstanding principal amount and interest due on the Notes
on the maturity date thereof, the Company agrees that on
September 8, 2006 and on each September 8 thereafter to and
including September 8, 2009 the Company will prepay $20,000,000
principal amount (or such lesser principal amount as shall then
be outstanding) of the Notes at par and without payment of the
Make-Whole Amount or any premium; provided that upon any partial
prepayment of the Notes pursuant to Section 8.2 or purchase of
the Notes permitted by Section 8.6 the principal amount of each
required prepayment of the Notes becoming due under this
Section 8.1 on and after the date of such prepayment or purchase
shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such
prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount The
Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in
an amount not less than 5% of the aggregate principal amount of
the Notes then outstanding in the case of a partial prepayment,
at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment,plus the
Make-Whole Amount determined for the prepayment date with respect
to such principal amount. The Company will give each holder of
Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior
to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to
be prepaid on such date, the principal amount of each Note held
by such holder to be prepaid (determined in accordance with
Section 8.4), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the
date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-
Whole Amount as of the specified prepayment date.
Section 8.3. Change in Control. (a) Notice of Change in Control
or Control Event. The Company will, within five Business Days
after any Responsible Officer has knowledge of the occurrence of
any Change in Control or Control Event, give written notice of
such Change in Control or Control Event to each holder of Notes
unless notice in respect of such Change in Control (or the Change
in Control contemplated by such Control Event) shall have been
given pursuant to subparagraph (b) of this Section. If a Change
in Control has occurred, such notice shall contain and constitute
an offer to prepay Notes as described in subparagraph (c) of this
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Section and shall be accompanied by the certificate described in
subparagraph (g) of this Section.
(b) Condition to Company Action. The Company will not take
any action that consummates or finalizes a Change in Control
unless (i) at least 30 days prior to such action it shall have
given to each holder of Notes written notice containing and
constituting an offer to prepay Notes as described in
subparagraph (c) of this Section, accompanied by the certificate
described in subparagraph (g) of this Section, and
(ii) contemporaneously with such action, it prepays all Notes
required to be prepaid in accordance with this Section.
(c) Offer to Prepay Notes. The offer to prepay Notes
contemplated by subparagraphs (a) and (b) of this Section shall
be an offer to prepay, in accordance with and subjec to this
Section, all, but not less than all, the Notes held by each
holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial
owner shall mean such beneficial owner) on a date specified in
such offer (the "Proposed Prepayment Date" ). Such offer shall
make reference to this Section 8.3, the date by which a holder of
the Notes must reply to such offer pursuant to Section 8.3(d)
hereof and that any failure to so reply shall be deemed a
rejection of such offer. If such Proposed Prepayment Date is in
connection with an offer contemplated by subparagraph (a) of this
Section, such date shall be not less than 30 days and not more
than 120 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the
Proposed Prepayment Date shall be the first Business Day after
the 45th day after the date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section by causing a notice of such
acceptance to be delivered to the Company not later than 15 days
after receipt by such holder of the most recent offer of
prepayment. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section shall be deemed to
constitute a rejection of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid
pursuant to this Section shall be at 100% of the principal amount
of such Notes, together with interest on such Notes accrued to
the date of prepayment, but without Make-Whole Amount or other
premium. The prepayment shall be made on the Proposed Prepayment
Date except as provided in subparagraph (f) of this Section.
(f) Deferral Pending Change in Control. The obligation of
the Company to prepay Notes pursuant to the offers required by
subparagraph (c) and accepted in accordance with subparagraph (d)
of this Section is subject to the occurrence of the Change in
Control in respect of which such offers and acceptances shall
have been made. In the event that such Change in Control has not
occurred on the Proposed Prepayment Date in respect thereof, the
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prepayment shall be deferred until, and shall be made on, the
date on which such Change in Control occurs. The Company shall
keep each holder of Notes reasonably and timely informed of
(i) any such deferral of the date of prepayment, (ii) the date on
which such Change in Control and the prepayment are expected to
occur, and (iii) any determination by the Company that efforts to
effect such Change in Control have ceased or been abandoned (in
which case the offers and acceptances made pursuant to this
Section in respect of such Change in Control shall be deemed
rescinded). In the event that such Change in Control has not
occurred within six months of the Proposed Prepayment Date in
respect thereof and no determination by the Company pursuant to
clause (iii) of the preceding sentence has been made that results
in any offer's rescission, the Company shall again offer to
prepay the Notes pursuant to subparagraph (c), which offer may be
accepted or rejected pursuant to this Section 8.3.
(g) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated
the date of such offer, specifying: (i) the Proposed Prepayment
Date; (ii) that such offer is made pursuant to this Section 8.3;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date; (v) that the
conditions of this Section have been fulfilled; and (vi) in
reasonable detail, the nature and date or proposed date of the
Change in Control.
(h) Certain Definitions. "Change in Control" shall be
deemed to have occurred if any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act), other than an Affiliate described on
Schedule 8.3,
(i) become the "beneficial owners" (as such term is
used in Rule 13d-3 under the Exchange Act as in effect on
the date of the Closing), directly or indirectly, of more
than 50% of the total voting power of all classes then
outstanding of the Company's Voting Stock, or
(ii) acquire after the date of the Closing (x) the
power to elect, appoint or cause the election or appointment
of at least a majority of the members of the board of
directors of the Company, through beneficial ownership of
the capital stock of the Company or otherwise, or (y) all or
substantially all of the properties and assets of the
Company.
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"Control Event" means:
(i) the execution by the Company or any of its
Restricted Subsidiaries or Affiliates of any agreement or
letter of intent with respect to any proposed transaction or
event or series of transactions or events which,
individually or in the aggregate, would, if consummated as
therein contemplated, result in a Change in Control,
(ii) the execution by the Company or any of its
Restricted Subsidiary of any written agreement which, when
fully performed by the parties thereto, would result in a
Change in Control, or
(iii) the making of any written offer by any person (as
such term is used in Section 13(d) and Section 14(d)(2) of
the Exchange Act as in effect on the date of the Closing) or
related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the
date of the Closing) to the holders of the common stock of
the Company, which offer, if accepted by the requisite
number of holders, would result in a Change in Control.
(i) All calculations contemplated in this Section 8.3
involving the capital stock of any Person shall be made with the
assumption that all convertible Securities of such Person then
outstanding and all convertible Securities issuable upon the
exercise of any warrants, options and other rights outstanding at
such time were converted at such time and that all options,
warrants and similar rights to acquire shares of capital stock of
such Person were exercised at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of
each partial prepayment of the Notes pursuant to Section 8.2, the
principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment. All prepayments
made pursuant to Section 8.3 and Section 10.9(b) or (c) shall be
applied only to the Notes of the holders who have elected to
participate in such prepayment.
Section 8.5. Maturity; Surrender, Etc. In the case of each
prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when
so due and payable, together with the interest and Make-Whole
Amount, if any, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and cancelled and shall not be
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reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will
not permit any Affiliate to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance
with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant
to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess,
if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over
the amount of such Called Principal; provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context
requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that
on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the
Called Principal of any Note, 0.50% over the yield to
maturity implied by (a) the yields reported, as of 10:00
A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page PX" of the
Bloomberg Financial Markets Services Screen (or, if not
available, any other national recognized trading screen
reporting on-line intraday trading in the U.S. Treasury
securities) for actively traded on-the-run U.S. Treasury
securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or
(b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of
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the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date.
Such implied yield will be determined, if necessary, by
(i) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial
practice and (ii) interpolating linearly between (1) the
actively traded on-the-run U.S. Treasury security with the
maturity closest to and greater than the Remaining Average
Life and (2) the actively traded on-the-run U.S. Treasury
security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (a) such
Called Principal into (b) the sum of the products obtained
by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(ii) the number of years (calculated to the nearest one-
twelfth year) that will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to
the Called Principal of any Note, all payments of such
Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made
prior to its scheduled due date; provided that if such
Settlement Date is not a date on which interest payments are
due to be made under the terms of the Notes, then the amount
of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
Section 9.1. Compliance with Law. The Company will, and will
cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of
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them is subject, including, without limitation, ERISA and
applicable laws in respect of Non-U.S. Pension Plans and all
Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 9.2. Insurance. The Company will, and will cause each
of its Restricted Subsidiaries to, maintain, with financially
sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and
will cause each of its Restricted Subsidiaries to, maintain and
keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times;
provided that this Section shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the
maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and
will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed
on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for
which sums have become due and payable that have or might become
a Lien on properties or assets of the Company or any Subsidiary;
provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability
or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books
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of the Company or such Subsidiary or (b) the nonpayment of all
such taxes and assessments in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. Subject to Section 10.9,
the Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 10.9, the
Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its
Restricted Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a
Material Adverse Effect.
Section 9.6. Notes to Rank Pari Passu. The Notes and all other
obligations under this Agreement of the Company are and at all
times shall remain direct obligations of the Company ranking pari
passu as against the assets of the Company with all other Notes
from time to time issued and outstanding hereunder without any
preference among themselves and pari passu with all other present
and future unsecured Indebtedness (actual or contingent) of the
Company which is not expressed to be subordinate or junior in
rank to any other unsecured Indebtedness of the Company.
Section 9.7. NAIC Certificate. Within fifteen Business Days
after the date of the Closing, the Company shall deliver to each
of the Holders a certificate certifying as to the answers to the
questions set forth in Schedule 9.7 regarding the status of
Company's internal computer systems and the impact that advent of
the year 2000 will have on such computer systems, which
certificate may be filed by the holders with the National
Association of Insurance Commissioners.
SECTION 10.NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
Section 10.1. Consolidated Adjusted Net Worth. The Company will
at all times keep and maintain Consolidated Adjusted Net Worth at
not less than the sum of (a) $125,000,000 plus (b) 50% of
Consolidated Net Income computed on a cumulative basis for each
of the elapsed fiscal quarters ending after March 31, 1998;
provided that notwithstanding that Consolidated Net Income for
any such elapsed fiscal quarter may be a deficit figure, no
reduction as a result thereof shall be made in the sum to be
maintained pursuant hereto.
Section 10.2. EBITDA Interest Expense Coverage Ratio. The
Company will at all times keep and maintain the ratio of (a)
Consolidated EBITDA for the immediately preceding four
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consecutive fiscal quarter period to (b) Consolidated Interest
Expense for such four consecutive fiscal quarter period at not
less than 2.5 to 1.0.
Section 10.3. Fixed Charges Coverage Ratio. The Company will at
all times keep and maintain the ratio of (a) Consolidated EBITDA
Available for Fixed Charges for the immediately preceding four
consecutive fiscal quarter period to (b) Consolidated Fixed
Charges for such four consecutive fiscal quarter period at not
less than 2.0 to 1.0.
Section 10.4. Certain Indebtedness Ratios. (a) The Company will
at all times keep and maintain the ratio of (i) Consolidated
Indebtedness to (ii) Consolidated Total Capitalization at not
more than 0.55 to 1.00.
(b) The Company will not at any time permit the ratio of (i)
the sum of, determined on a consolidated basis in accordance with
GAAP, (A) the aggregate amount of all Indebtedness of the Company
secured by Liens within the limitations of clauses (f) through
(m) of Section 10.7 plus (B) the aggregate amount of all
Indebtedness of Restricted Subsidiaries (other than Indebtedness
permitted pursuant to Section 10.5(a)(ii)) plus (C) the
aggregate liquidation value of all Preferred Stock of Restricted
Subsidiaries (other than Preferred Stock permitted pursuant to
Section 10.5(a)(ii)) to (ii) Consolidated Adjusted Net Worth to
exceed 0.30 to 1.00.
Section 10.5. Limitations on Indebtedness and Preferred Stock of
Restricted Subsidiaries. (a) The Company will not permit any
Restricted Subsidiary to create, issue, assume, guarantee or
otherwise incur or in any manner become liable in respect of any
Indebtedness or Preferred Stock, except:
(i) Indebtedness or Preferred Stock of a Restricted
Subsidiary outstanding as of the date of Closing and
described on Schedule 5.15 hereto;
(ii) Indebtedness or Preferred Stock of a Restricted
Subsidiary owing or issued to the Company or to a Wholly-
owned Restricted Subsidiary; and
(iii) additional Indebtedness or Preferred Stock of a
Restricted Subsidiary created, issued, assumed, guaranteed
or incurred within the limitations provided in
Sections 10.6(b) and 10.4(b) hereof.
(b) Indebtedness or Preferred Stock existing within the
limitations of Section 10.5(a)(i) may be renewed, extended or
refinanced (without increase in principal amount or liquidation
value, as the case may be, at the time of such renewal, extension
or refunding and subject only to covenants or restrictions which
are not materially more onerous than those applicable to such
Indebtedness or Preferred Stock, as the case may be, at the time
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of original issuance thereof) without regard to the limitations
of Section 10.5(a)(iii), except that no such Indebtedness or
Preferred Stock may in any event be renewed, extended or
refinanced if at the time thereof and after the concurrent giving
effect thereto and to the application of the proceeds thereof, a
Default or Event of Default would exist.
Section 10.6. Priority Liabilities. The Company will not, and
will not permit any Restricted Subsidiary to create, issue,
assume, guarantee or otherwise incur or in any manner become
liable in respect of any Priority Liability, unless:
(a) in the case of Indebtedness of the Company or any
Restricted Subsidiary secured by any Lien created pursuant
to Section 10.7(l), at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after the
concurrent giving effect thereto and to the application of
the proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default
would exist;
(ii) the aggregate amount of all Indebtedness of
the Company or any Restricted Subsidiary (other than
such Indebtedness permitted pursuant to
Section 10.5(a)(ii)) secured by Liens created pursuant
to Section 10.7(l) (including the Indebtedness then to
be created, issued, assumed, guaranteed or incurred,
but excluding MARAD Indebtedness) would not exceed 15%
of Consolidated Adjusted Net Worth; and
(iii) the aggregate amount of all Indebtedness of
the Company or any Restricted Subsidiary (other than
such Indebtedness permitted pursuant to
Section 10.5(a)(ii)) secured by Liens created pursuant
to Section 10.7(l) (including the Indebtedness then to
be created, issued, assumed, guaranteed or incurred and
any MARAD Indebtedness) would not exceed 25% of
Consolidated Adjusted Net Worth;
(b) in the case of Indebtedness or any Preferred Stock
of a Restricted Subsidiary (other than Indebtedness
permitted pursuant to Section 10.5(a)(i) or (ii) hereof), at
the time of creation, issuance, assumption, guarantee or
incurrence thereof and after the concurrent giving effect
thereto and to the application of the proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default
would exist; and
(ii) the aggregate amount of all Indebtedness of
Restricted Subsidiaries (other than Indebtedness
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permitted pursuant to Section 10.5(a)(ii) hereof) plus
the aggregate liquidation value of all Preferred Stock
of Restricted Subsidiaries (including the Indebtedness
or Preferred Stock then to be created, issued, assumed,
guaranteed or incurred) would not exceed 15% of
Consolidated Adjusted Net Worth.
Section 10.7. Limitation on Liens. The Company will not, and
will not permit any Restricted Subsidiary to, create or incur, or
suffer to be incurred or to exist, any Lien on its or their
property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property
for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any
Restricted Subsidiary to acquire, any property or assets upon
conditional sales agreements or other title retention devices,
except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or
demands of mechanics, materialmen, vendors, carriers and
warehousemen and other like Persons; provided that payment
thereof is not at the time required by Section 9.4;
(b) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which the Company
or a Restricted Subsidiary shall at any time in good faith
be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in
connection with worker's compensation, unemployment
insurance and other like laws, maritime, warehousemen's and
attorneys' liens, statutory landlords' liens and deposits
made to obtain insurance), customary statutory, common law
and contractual rights of a bank to set-off claims of such
bank against cash on deposit with such bank, and Liens to
secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds
or other Liens of like general nature, in any such case
incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each
case, the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor defects,
irregularities in title, encumbrances, easements,
restrictions or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or
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zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or
which customarily exist on properties of corporations
engaged in similar activities and similarly situated and
which do not in any event materially impair their use in the
operation of the business of the Company and its Restricted
Subsidiaries;
(e) Liens securing Indebtedness of a Restricted
Subsidiary to the Company or to another Wholly-owned
Restricted Subsidiary;
(f) Liens existing as of date of the Closing and
described on Schedule 5.15 hereto;
(g) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by the
Company or any Restricted Subsidiary in a joint venture,
provided that the proceeds of Indebtedness of the Company or
such Restricted Subsidiary secured by such Liens are in
their entirety contributed or advanced to such joint
venture; provided, further, that (i) at the time of the
creation, issuance, assumption, guarantee or incurrence of
any such Indebtedness by the Company or any Restricted
Subsidiary and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of
Default would exist, (ii) any such Indebtedness, created,
issued, assumed, guaranteed or incurred by the Company or
any Restricted Subsidiary shall have been created within the
applicable limitations of Section 10.6, (iii) with respect
to any such Indebtedness neither the Company or any
Restricted Subsidiary, nor any of the property or assets of
the Company or any Restricted Subsidiary, other than
proceeds realized from the sale or other disposition of such
capital stock, partnership or other equity interests shall,
directly or indirectly, be liable for or secure in any
manner whatsoever the payment thereof and (iv) such
Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof;
(h) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by the
Company or any Restricted Subsidiary in a joint venture,
provided that the proceeds of Indebtedness created by an
Unrestricted Subsidiary or any other Affiliate secured by
such Liens are in their entirety contributed or advanced to
such joint venture; provided, further, that with respect to
any such Indebtedness neither the Company nor any Restricted
Subsidiary, nor any of the property or assets of the Company
or any Restricted Subsidiary, other than proceeds realized
from the sale or other disposition of such capital stock,
partnership or other equity interests shall, directly or
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indirectly, be liable for or secure in any manner whatsoever
the payment thereof;
(i) Liens created or incurred after the date of the
Closing given to secure the payment of the purchase price
incurred in connection with the acquisition or purchase of
assets useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary, so long
as such Liens were not incurred, extended or renewed in
contemplation of such acquisition or purchase; provided that
(i) the Lien shall attach solely to the assets acquired or
purchased, (ii) such Lien shall have been created or
incurred within 180 days of the date of acquisition or
purchase, (iii) at the time of acquisition or purchase of
such assets, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets, whether or not
assumed by the Company or a Restricted Subsidiary, shall not
exceed an amount equal to the lesser of the total purchase
price or fair market value at the time of acquisition or
purchase of such assets (as determined in good faith by the
Board of Directors of the Company), (iv) if the Indebtedness
secured by such Lien shall have been incurred by a
Restricted Subsidiary, then and in such event such
Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof, and
(v) at the time of the creation, issuance, assumption,
guarantee or incurrence of such Indebtedness and after
giving effect thereto and to the application of the proceeds
thereof, no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default would
exist;
(j) Liens created or incurred after the date of the
Closing existing on such assets at the time of acquisition
thereof or at the time of acquisition or purchase by the
Company or a Restricted Subsidiary of any business entity
then owning such fixed assets, so long as such Liens were
not incurred, extended or renewed in contemplation of such
acquisition or purchase; provided that (i) the Lien shall
attach solely to the assets acquired or purchased, (ii) if
the Indebtedness secured by such Lien shall have been
assumed by a Restricted Subsidiary, then and in such event
such Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof, and
(iii) at the time of the assumption of such Indebtedness and
after the concurrent giving effect thereto, no Default,
including, without limitation, a Default under Section
10.4(b), or Event of Default would exist;
(k) Liens created under charters entered into by the
Company or any Restricted Subsidiary in the ordinary course
of its business, as owner or lessor of an asset, creating
leasehold interests therein; provided that the creation of
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such Liens is otherwise permitted within the terms of this
Agreement;
(l) Liens created or incurred after the date of the
Closing given to secure Indebtedness of the Company or any
Restricted Subsidiary in addition to the Liens permitted by
the preceding clauses (a) through (k) hereof; provided that
all Indebtedness secured by such Liens shall have been
incurred within the applicable limitations provided in
Section 10.6; and
(m) any extension, renewal or refunding of any Lien
permitted by the preceding clauses (f) through (k) of this
Section 10.7 in respect of the same property theretofore
subject to such Lien in connection with the extension,
renewal or refunding of the Indebtedness secured thereby;
provided that (i) such extension, renewal or refunding of
the Indebtedness to which such Lien relates shall be without
increase in the principal amount remaining unpaid as of the
date of such extension, renewal or refunding, (ii) such Lien
shall attach solely to the same such property and (iii) at
the time of the extension, renewal or refunding of such
Indebtedness and after giving effect thereto and to the
application of the proceeds thereof, no Default, including,
without limitation, a Default under Section 10.4(b), or
Event of Default would exist.
Section 10.8. Dividends, Stock Purchases, Restricted Investments.
(a) The Company will not and the Company will not permit any of
its Restricted Subsidiaries to, directly or indirectly, or
through any Affiliate, declare or make or incur any liability to
declare or make any Distribution (other than redemptions,
acquisitions or retirements of common stock to the extent of net
cash proceeds received from the substantially concurrent sale or
exchange of common stock of the Company) and neither the Company
nor any of its Restricted Subsidiaries will make orauthorize any
Restricted Investment, unless, immediately after giving effect to
the proposed Distribution or Restricted Investment, the aggregate
amount of Distributions declared in the case of dividends or made
in the case of other Distributions plus the aggregate amount of
Restricted Investments then held by the Company and its
Restricted Subsidiaries (valued immediately after the making of
such Restricted Investment as provided in the definition thereof)
during the period from and after the date of this Agreement to
and including the date of declaration in the case of a dividend,
the date of payment in the case of any other Distribution and the
date such Restricted Investment is made, would not exceed the sum
of:
(i) $25,000,000; plus
(ii) 50% of Consolidated Net Income (or if such
Consolidated Net Income is a deficit figure, then minus 100%
of such deficit) for such period determined on a cumulative
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basis commencing on April 1, 1998, to and including the date
of such declaration, payment or commitment; plus
(iii) an amount equal to the aggregate net cash proceeds
received by the Company from the sale on or after the date
of the Closing of shares of its common stock or other
Securities convertible into common stock of the Company or
the amount that Indebtedness of the Company owing to a
Person other than a Subsidiary is reduced by the conversion
or exchange after the date of the Closing of such
Indebtedness into common stock of the Company; plus
(iv) to the extent not included in the determination of
Consolidated Net Income any repayments of or returns in cash
on any Restricted Investment previously made within the
limitations of this Section 10.8(a), including the
reissuance of treasury stock or issuance of new stock of the
Company in satisfaction of usual and customary employee
benefit and other like obligations of the Company and its
Subsidiaries that could otherwise be settled in cash; plus
(v) an amount equal to the aggregate cash paid by the
Company for shares of common stock of the Company to the
extent additional shares of common stock of the Company were
issued by the Company in connection with the acquisition by
the Company of assets within the twelve calendar month
period immediately preceding the date of determination under
this Section 10.8.
(b) For the purposes of making computations under
paragraph (a) of this Section 10.8, the amount of any
Distribution declared, paid or distributed or Restricted
Investment made in property or assets of the Company or a
Restricted Subsidiary shall be deemed to be the book value of
such property or assets as of the date of declaration in the case
of a dividend, the date of payment in the case of any other
Distribution and the date the Restricted Investment is made.
Any corporation which becomes a Restricted Subsidiary after
the date of this Agreement shall be deemed to have made, at the
time it becomes a Restricted Subsidiary, all Restricted
Investments of such corporation existing immediately after it
becomes a Restricted Subsidiary.
(c) The Company will not authorize a Distribution on its
capital stock which is not payable within 60 days of
authorization. The Company may make any Distribution within 60
days after the declaration thereof if at the time of declaration
such Distribution would have complied with this Section 10.8.
(d) The Company will not authorize or make a Distribution on
its capital stock and neither the Company nor any Restricted
Subsidiary will make any Restricted Investment if after giving
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effect to the proposed Distribution or Restricted Investment a
Default or an Event of Default would exist.
Section 10.9. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, consolidate with or be a party to a merger with
any other Person, or sell, lease or otherwise dispose of all or
substantially all of its assets; provided that:
(i) any Restricted Subsidiary may merge or consolidate
with or into the Company or any Wholly-owned Restricted
Subsidiary so long as in (1) any merger or consolidation
involving the Company, the Company shall be the surviving or
continuing corporation and (2) in any merger or
consolidation involving a Wholly-owned Restricted Subsidiary
(and not the Company), the Wholly-owned Restricted
Subsidiary shall be the surviving or continuing corporation;
(ii) the Company may consolidate or merge with or into
any other corporation if (1) the corporation which results
from such consolidation or merger (the "surviving
corporation") is organized under the laws of any state of
the United States or the District of Columbia, (2) the due
and punctual payment of the principal of and premium, if
any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation
of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly
assumed in writing by the surviving corporation and the
surviving corporation shall furnish to the holders of the
Notes an opinion of counsel satisfactory to such holders to
the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (3) at
the time of such consolidation or merger and immediately
after giving effect thereto, (A) no Default or Event of
Default would exist and (B) the surviving corporation would
be permitted by the provisions of Section 10.6(a) to incur
at least $1.00 of additional Indebtedness;
(iii) the Company may sell or otherwise dispose of all
or substantially all of its assets (other than stock and
Indebtedness of a Restricted Subsidiary, which may only be
sold or otherwise disposed of pursuant to Section 10.9(c))
to any Person for consideration which represents the fair
market value of such assets (as determined in good faith by
the Board of Directors of the Company) at the time of such
sale or other disposition if (1) the acquiring Person is a
corporation organized under the laws of any state of the
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United States or the District of Columbia, (2) the due and
punctual payment of the principal of and premium, if any,
and interest on all the Notes, according to their tenor, and
the due and punctual performance and observance of all of
the covenants in the Notes and in this Agreement to be
performed or observed by the Company are expressly assumed
in writing by the acquiring corporation and the acquiring
corporation shall furnish to the holders of the Notes an
opinion of counsel satisfactory to such holders to the
effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of such
acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (3) at
the time of such sale or disposition and immediately after
giving effect thereto, (A) no Default or Event of Default
would exist and (B) the acquiring corporation would be
permitted by the provisions of Section 10.6(a) to incur at
least $1.00 of additional Indebtedness.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon as obsolete or
otherwise dispose of assets (except assets sold, leased or
otherwise disposed of in the ordinary course of business for fair
market value and except as provided in Section 10.9 (a)(iii) and
(c); provided that the foregoing restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of
assets of a Restricted Subsidiary to the Company or a
Wholly-owned Restricted Subsidiary; or
(ii) the sale, lease, transfer or other disposition of
assets for cash or other property to a Person or Persons if
all of the following conditions are met:
(1) in the opinion of (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer, the sale is for fair value and is in the best
interests of the Company;
(2) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of
Section 10.6(a) to incur at least $1.00of additional
Indebtedness; and
(3) the entirety of the proceeds (net of expenses
and taxes arising in connection therewith) ("Net
Proceeds") from any such sale or other disposition
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shall be applied within 360 days of receipt thereof by
the Company or a Restricted Subsidiary either (A) to
the acquisition (directly or through acquisition of a
Restricted Subsidiary) of assets (other than cash, cash
equivalents or Securities) useful and intended to be
used in the operation of the business of the Company
and its Restricted Subsidiaries as described in
Section 9.6 and having a fair market value (as
determined in good faith by (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer) at least equal to that of the assets so
disposed of or (B) towards the offer of prepayment at
any applicable prepayment premium of Senior
Indebtedness of the Company owing to any Person other
than a Restricted Subsidiary or Affiliate upon the
terms and conditions hereinafter provided; provided,
that if for any reason whatsoever the Company does not
apply all of the Net Proceeds from any such sale in
compliance with clause (A) or (B) of this Section
10.9(b)(ii)(3) within such 360 day period, then and in
such event when the aggregate Net Proceeds from all
sales or other dispositions not so applied exceed
$5,000,000 in the aggregate (the "Asset Sale
Prepayment Amount"), the Company shall, not less than
10 days nor more than 30 days following the date on
which the aggregate Net Proceeds from all sales or
other dispositions not so applied exceed the Asset Sale
Prepayment Amount and to the extent provided in the
foregoing proviso of this Section 10.9(b), offer
pursuant to a written notice (the "Asset Disposition
Prepayment Notice") to apply on a pro rata basis the
Asset Sale Prepayment Amount towards the prepayment of
all outstanding Notes. Such Asset Disposition
Prepayment Notice shall specify (y) a date (the "Asset
Disposition Prepayment Date"), which shall be not less
than 120 days nor more than 180 days following the date
of such Asset Disposition Prepayment Notice, on which
the Company will apply such Asset Sale Prepayment
Amount to the prepayment on a pro rata basis of all of
the outstanding Notes held by any Person which accepts
such offer of prepayment and (z) a date, which shall be
not more than 60 days nor less than 30 days prior to
such Asset Disposition Prepayment Date, on which each
holder of the Notes must accept or decline such offer
of prepayment.
On such Asset Disposition Prepayment Date, the
Company shall apply the Asset Sale Prepayment Amount to
the prepayment of the Notes held by each holder thereof
which has accepted such offer to the prepayment of the
Notes as and to the extent herein contemplated. It is
understood and agreed by the Company and each holder of
the Notes, by its acceptance thereof, that any such
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holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any
such offer of prepayment shall be deemed to be a
rejection by such holder to accept such prepayment and
that if any such offer is accepted, the Asset Sale
Prepayment Amount so offered towards the prepayment of
the Notes and accepted shall be prepaid pursuant to
Section 8.2 hereof, excepting only that such prepayment
shall be at par and together with interest accrued on
the amount to be so prepaid to the date of prepayment,
but without premium or Make-Whole Amount. To the
extent that any holder of the Notes declines such offer
of prepayment, the Company and its Restricted
Subsidiaries may use the remaining amount of such
declined Asset Sale Prepayment Amount for general
corporate purposes, and the amount of Asset Sale
Prepayment Amount shall be reset at zero.
Computations pursuant to this Section 10.9(b) shall include
dispositions made pursuant to Section 10.9(c) and computations
pursuant to Section 10.9(c) shall include dispositions made
pursuant to this Section 10.9(b).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, pledge or otherwise dispose of any shares of
the stock or other ownership interests (including as "stock"
for the purposes of this Section 10.9(c) any options or warrants
to purchase stock or other Securities exchangeable for or
convertible into stock or other ownership interests) of a
Restricted Subsidiary (said stock, options, warrants and other
Securities herein called "Subsidiary Stock") or any
Indebtedness of any Restricted Subsidiary, nor will any
Restricted Subsidiary issue, sell, pledge or otherwise dispose of
any shares of its own Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares or
Regulatory Shares; or
(ii) the issue of Subsidiary Stock to the Company; or
(iii) the sale or transfer by the Company or a
Restricted Subsidiary of any Subsidiary Stock to the Company
or to a Wholly-owned Restricted Subsidiary; or
(iv) any other sale or other disposition at any one
time to a Person (other than directly or indirectly to an
Affiliate) of the entire Investment of the Company and its
other Restricted Subsidiaries in any Restricted Subsidiary
if all of the following conditions are met:
(1) in the opinion of (i) the Company's Board of
Directors if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
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Officer, the sale is for fair value and is in the best
interests of the Company;
(2) immediately after the consummation of the
transaction and after giving effect thereto, such
Restricted Subsidiary shall have no Indebtedness of or
continuing Investment in the capital stock of the
Company or of any Restricted Subsidiary and any such
Indebtedness or Investment shall have been discharged
or acquired, as the case may be, by the Company or a
Restricted Subsidiary; and
(3) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of
Section 10.6(a) to incur at least $1.00 of additional
Indebtedness; and
(4) the entirety of the Net Proceeds from any
such sale or other disposition shall be applied within
360 days of receipt thereof by the Company or a
Restricted Subsidiary either (A) to the acquisition
(directly or through acquisition of a Restricted
Subsidiary) of assets (other than cash, cash
equivalents or Securities) useful and intended to be
used in the operation of the business of the Company
and its Restricted Subsidiaries as described in
Section 9.6 and having a fair market value (as
determined in good faith by (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer) at least equal to that of the assets so
disposed of or (B) towards the offer of prepayment at
any applicable prepayment premium of Senior
Indebtedness of the Company owing to any Person other
than a Restricted Subsidiary or Affiliate upon the
terms and conditions hereinafter provided; provided,
that if for any reason whatsoever the Company does not
apply all of the Net Proceeds from any such sale in
compliance with clause (A) or (B) of this Section
10.9(c)(iv)(4) within such 360 day period, then and in
such event when the aggregate Net Proceeds from all
sales or other dispositions not so applied exceed the
Asset Sale Prepayment Amount, the Company shall, not
less than 10 days nor more than 30 days following the
date on which the aggregate Net Proceeds from all sales
or other dispositions not so applied exceed the Asset
Sale Prepayment Amount and to the extent provided in
the foregoing proviso of this Section 10.9(c), offer
pursuant to an Asset Disposition Prepayment Notice to
apply on a pro rata basis the Asset Sale Prepayment
Amount towards the prepayment of all outstanding Notes.
Such Asset Disposition Prepayment Notice shall specify
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(y) an Asset Disposition Prepayment Date which shall
be not less than 120 days nor more than 180 days
following the date of such Asset Disposition Prepayment
Notice, on which the Company will apply such Asset Sale
Prepayment Amount to the prepayment on a pro rata basis
of all of the outstanding Notes held by any Person
which accepts such offer of prepayment and (z) a date,
which shall be not more than 60 days nor less than 30
days prior to such Asset Disposition Prepayment Date,
on which each holder of the Notes must accept or
decline such offer of prepayment.
On such Asset Disposition Prepayment Date, the
Company shall apply the Asset Sale Prepayment Amount to
the prepayment of the Notes held by each holder thereof
which has accepted such offer to the prepayment of the
Notes as and to the extent herein contemplated. It is
understood and agreed by the Company and each holder of
the Notes, by its acceptance thereof, that any such
holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any
such offer of prepayment shall be deemed to be a
rejection by such holder to accept such prepayment and
that if any such offer is accepted, the Asset Sale
Prepayment Amount so offered towards the prepayment of
the Notes and accepted shall be prepaid pursuant to
Section 8.2 hereof, excepting only that such prepayment
shall be at par and together with interest accrued on
the amount to be so prepaid to the date of prepayment,
but without premium or Make-Whole Amount. To the
extent that any holder of the Notes declines such offer
of prepayment, the Company and its Restricted
Subsidiaries may use the remaining amount of such
declined Asset Sale Prepayment Amount for general
corporate purposes, and the amount of Asset Sale
Prepayment Amount shall be reset at zero.
Computations pursuant to this Section 10.9(c) shall include
dispositions made pursuant to Section 10.9(b) and computations
pursuant to Section 10.9(b) shall include dispositions made
pursuant to this Section 10.9(c).
Section 10.10. Limitations on Restricted Agreements. The Company
will not, nor will it permit any Restricted Subsidiary to, enter
into, or suffer to exist, any agreement with any Person which,
directly or indirectly, prohibits or limits the ability of any
Restricted Subsidiary to (a) pay dividends or make other
distributions to the Company or prepay any Indebtedness owed to
the Company, (b) make loans or advances to the Company or
(c) transfer any of its properties or assets to the Company other
than for such restrictions existing under or by reason of
(i) applicable law or any order or ruling by any governmental
authority; (ii) the Credit Agreement or any agreement relating to
any Indebtedness permitted under this Agreement; (iii) customary
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non-assignment provisions of any contract; (iv) customary
restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business;
(v) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the
property so acquired; (vi) contracts for the sale of assets,
including, without limitation, customary restrictions with
respect to a Restricted Subsidiary pursuant to an agreement that
has been entered into for the sale of all or substantially all of
the capital stock or assets of such Restricted Subsidiary;
(vii) any agreement or other instrument governing Indebtedness of
a Person acquired by the Company or any Restricted Subsidiary (or
of a Restricted Subsidiary of such Person) in existence at the
time of such acquisition (but not created in contemplation
thereof), which restriction is not applicable to the Company or
any Restricted Subsidiary, or assets of any such Person, other
than the Person, or assets or Subsidiaries of the Person, so
acquired; or (viii) provisions contained in agreements relating
to Indebtedness which prohibit the transfer of all or
substantially al of the assets of the obligor thereunder unless
the transferee shall assume the obligations of the obligor under
such agreement or instrument.
Section 10.11. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a
result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by the Company
and its Restricted Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company
and its Restricted Subsidiaries on the date of this Agreement and
businesses related thereto.
Section 10.12. Transactions with Affiliates. The Company will
not, and will not permit any Restricted Subsidiary to, enter into
or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale
to or exchange of property with, or the rendering of any service
by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable
terms not significantly less favorable to the Company or such
Restricted Subsidiary than would obtain in a comparable arm's-
length transaction with a Person other than an Affiliate.
Section 10.13. Designation of Subsidiaries. The Company may
designate or redesignate any Unrestricted Subsidiary as a
Restricted Subsidiary and may designate or redesignate any
Restricted Subsidiary as an Unrestricted Subsidiary; provided
that:
(a) the Company shall have given not less than 10
days' prior written notice to the holders of the Notes that
a Senior Financial Officer has made such determination,
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(b) at the time of such designation or redesignation
and immediately after giving effect thereto: (i) no Default
or Event of Default would exist and (ii) the Company would
be permitted by the provisions of Section 10.6(a) to incur
at least $1.00 of additional Indebtedness,
(c) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary and after giving
effect thereto, (i) such Unrestricted Subsidiary so
designated shall not, directly or indirectly, own any
Indebtedness or capital stock of the Company or any
Restricted Subsidiary, (ii) such designation shall be deemed
a sale of assets and shall be permitted by the provisions of
Section 10.9(b)(ii), (iii) neither the Company nor any
Restricted Subsidiary shall be liable for any Indebtedness
of such Unrestricted Subsidiary so designated (other than
Indebtedness which at the time of incurrence shall be
permitted within the limitations of Section 10.6(b) or at
the time of such designation shall be permitted within the
limitations of Section 10.8(a) and 10.6(b)), (iv) no default
or condition in respect of any Indebtedness of such
Unrestricted Subsidiary so designated could as a consequence
of such default or condition cause or permit any
Indebtedness of the Company or any Restricted Subsidiary to
become, or to be declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment,
(v) any continuing Investment in the capital stock of such
Subsidiary held by the Company or of any Restricted
Subsidiary shall at the time of such designation be
permitted (without reference to paragraph (a) of the
definition of _Restricted Investments_ ), within the
limitations of Section 10.8, and (vi) such designation shall
not result in the imposition of a Lien on the assets of the
Company or any Restricted Subsidiary, other than a Lien
permitted within the limitations of Section 10.7,]
(d) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary and after giving
effect thereto: (i) all outstanding Indebtedness and
Preferred Stock of such Restricted Subsidiary so designated
shall be permitted within the applicable limitations of
Section 10.6(b) and (ii) all existing Liens of such
Restricted Subsidiary so designated shall be permitted
within the applicable limitations of Section 10.7, other
than Section 10.7(f) notwithstanding that any such Lien
existed as of the date of Closing), and
(e) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary, such Restricted
Subsidiary shall not at any time after the date of this
Agreement have previously been designated as an Unrestricted
Subsidiary more than once, and
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(f) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary, such Unrestricted
Subsidiary shall not at any time after the date of this
Agreement have previously been designated as a Restricted
Subsidiary more than once.
SECTION 11.EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the
same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any
interest on any Note for more than five Business Days after
the same becomes due and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Sections 10.1 through
10.9; or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those
referred to in paragraphs (a), (b) and (c) of this
Section 11) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a
_notice of default_ and to refer specifically to this
paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by
or on behalf of the Company or by any officer of the Company
in this Agreement or in any writing furnished in connection
with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date
as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in
the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness (other than the Notes
and other than Indebtedness, the payments for which have
been made into an escrow or court appointed trustee or
account pending settlement of a dispute) that is outstanding
in an aggregate principal amount of at least, in the case of
any single default, $3,000,000 and, in the case of all
defaults collectively, $5,000,000 beyond any period of grace
provided with respect thereto, or
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(ii) the Company or any Restricted Subsidiary is
in default in the performance of or compliance with any
term of any evidence of any Indebtedness (other than
the Notes and other than Indebtedness outstanding under
the Credit Agreement, provision for which is made in
Section 11(g)) that is outstanding in an aggregate
principal amount of at least, in the case of any single
default, $3,000,000 and, in the case of all defaults
collectively, $5,000,000 or of any mortgage, indenture
or other agreement relating thereto or any other
condition exists, and as a consequence of such default
or condition such Indebtedness has become, or has been
declared (or one or more Persons are entitled to
declare such Indebtedness to be), due and payable
before its stated maturity or before its regularly
scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the
passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity
interests), (1) the Company or any Restricted
Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its
regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least, in the case
of any single default, $3,000,000 and, in the case of
all defaults collectively, $5,000,000, or (2) one or
more Persons have the right to require the Company or
any Restricted Subsidiary so to purchase or repay such
Indebtedness; or
(g) default or the happening of any event shall occur
under the Credit Agreement and such default or event shall
continue for a period of time sufficient to permit the
acceleration of the maturity of any Indebtedness for
borrowed money of the Company or any Restricted Subsidiary
outstanding thereunder; or
(h) the Company or any Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or
(vi) takes corporate action for the purpose of any of the
foregoing; or
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(i) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
the Company or any of its Restricted Subsidiaries, a
custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Restricted
Subsidiaries, or any such petition shall be filed against
the Company or any of its Restricted Subsidiaries and such
petition shall not be dismissed within 60 days; or
(j) a final judgment or judgments for the payment of
money aggregating in excess of $5,000,000 (excluding for
purposes of such determination such amount of any insurance
proceeds paid by or on behalf of the Company or any of its
Restricted Subsidiaries in respect of such judgment or
judgments or unconditionally acknowledged in writing to be
payable by the insurance carrier that issued the related
insurance policy) are rendered against one or more of the
Company and its Restricted Subsidiaries and which judgments
are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of
any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA Section 4042 to terminate or appoint
a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may
become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within
the meaning of Section 4001(a)(18) of ERISA) under all
Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to
incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Restricted Subsidiary establishes or amends
any employee welfare benefit plan that provides post-
employment welfare benefits in a manner that would increase
the liability of the Company or any Restricted Subsidiary
thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or
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together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
SECTION 12.REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with
respect to the Company described in paragraph (h) or (i) of
Section 11 (other than an Event of Default described in clause
(i) of paragraph (h) or described in clause (vi) of paragraph (h)
by virtue of the fact that such clause encompasses clause (i) of
paragraph (h)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 50% in principal
amount of the Notes at the time outstanding may at any time at
its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
(b) of Section 11 has occurred and is continuing, any holder or
holders of Notes at the time outstanding affected by such Event
of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them
to be immediately due and payable.
Upon any Note's becoming due and payable under this
Section 12.1, whether automatically or by declaration, such Note
will forthwith mature and the entire unpaid principal amount of
such Note, plus (i) all accrued and unpaid interest thereon and
(ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every
case without presentment, demand, protest or further notice, all
of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to
maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for), and that
the provision for payment of a Make-Whole Amount by the Company
in the event that the Notes are prepaid or are accelerated as a
result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such
circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any
Notes have become or have been declared immediately due and
payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate
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proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the holders of not less than 66-2/3% in principal
amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on
the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have
been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant
hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of
Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by
statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient to
cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and
disbursements.
SECTION 13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at
its principal executive office a register for the registration
and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall
be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company
-45-
shall give to any holder of a Note that is an Institutional
Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of
Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of
any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or its attorney duly
authorized in writing and accompanied by the address for notices
of each transferee of such Note or part thereof), the Company
shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of
Exhibit 1. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less
than $100,000; provided that if necessary to enable the
registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000.
Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made
the representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and
such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if
the holder of such Note is, or is a nominee for, an original
Purchaser or another holder of a Note with a minimum net
worth of at least $10,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory),
or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen,
-46-
destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have
been paid thereon.
SECTION 14.PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2,
payments of principal, Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made in New York,
New York at the principal office of Chase Manhattan Bank in such
jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal
office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your
nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note
for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other
address as you shall have from time to time specified to the
Company in writing for such purpose, without the presentation or
surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full
of any Note, you shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1.
Prior to any sale or other disposition of any Note held by you or
your nominee you will, at your election, either endorse thereon
the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to
Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such
Note as you have made in this Section 14.2.
SECTION 15.EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the
transactions contemplated hereby are consummated, the Company
will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or
other counsel) incurred by you and each Other Purchaser or holder
of a Note in connection with such transactions and in connection
with any amendments, waivers or consents under or in respect of
this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, without
-47-
limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and
expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or
any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other
than those retained by you).
Section 15.2. Survival. The obligations of the Company under
this Section 15 will survive the payment or transfer of any Note,
the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.
SECTION 16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by you of any Note or portion
thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the
Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and
the Notes embody the entire agreement and understanding between
you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 17.AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you
unless consented to by you in writing, and (b) no such amendment
or waiver may, without the written consent of the holder of each
Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on,
-48-
the Notes, (ii) change the percentage of the principal amount of
the Notes the holders of which are required to consent to any
such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it)
with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or
true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which
it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant
any security, to any holder of Notes as consideration for or as
an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder
of Notes then outstanding even if such holder did not consent to
such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver
consented to as provided in this Section 17 applies equally to
all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to
whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder
of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement"
and references thereto shall mean this Agreement as itmay from
time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose
of determining whether the holders of the requisite percentage of
the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given
under this Agreement or the Notes, or have directed the taking of
any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes
-49-
directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
SECTION 18.NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by telefacsimile if the sender on the
same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by
registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such holder
at such address as such other holder shall have specified to
the Company in writing, or
(iii) if to the Company, to the Company at its address
set forth at the beginning hereof to the attention of Chief
Financial Officer, or at such other address as the Company
shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received.
SECTION 19.REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents
received by you at the Closing (except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may
destroy any original document so reproduced. The Company agrees
and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same
extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
-50-
SECTION 20.CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf
of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified in writing
when received by you as being confidential information of the
Company or such Subsidiary; provided that such term does not
include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any Person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial
statements delivered to you under Section 7.1 that are otherwise
publicly available. You will maintain the confidentiality of
such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information
of third parties delivered to you; provided that you may deliver
or disclose Confidential Information to (i) your directors,
trustees, officers, employees, agents, authorized
representatives, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you
sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which you
offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you, (vii) the National Association of
Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other
Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the
rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of
this Section 20 as though it were a party to this Agreement. On
-51-
reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered
to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 20.
SECTION 21.SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which
notice shall be signed by both you and such Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement
and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in
Section 6. Upon receipt of such notice, wherever the word
_you_ is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate
in lieu of you. In the event that such Affiliate is so
substituted as a purchaser hereunder and such Affiliate
thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word _you_ is used in this Agreement
(other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and
you shall have all the rights of an original holder of the Notes
under this Agreement.
SECTION 22.MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of
the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation,
any subsequent holder of a Note) whether so expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or Make-Whole Amount or interest on any
Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest
payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent
permitted by law) not invalidate or render unenforceable such
provision in any other jurisdiction.
-52-
Section 22.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person.
Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be
made by the Company for the purposes of this Agreement, the same
shall be done by the Company in accordance with GAAP, to the
extent applicable, except where such principles are inconsistent
with the requirements of this Agreement.
Section 22.5. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original
but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed
by less than all, but together signed by all, of the parties
hereto.
Section 22.6. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties
shall be governed by, the law of the State of New York, excluding
choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than
such State.
* * * * *
-53-
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this
Agreement and return it to the Company, whereupon the foregoing
shall become a binding agreement between you and the Company.
Very truly yours,
OCEANEERING INTERNATIONAL, INC.
By ______________________________
Title
Accepted as of ____________________.
[VARIATION]
By ______________________________
Its
-54-
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE NORTHWESTERN MUTUAL LIFE $31,000,000
INSURANCE COMPANY
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Bankers Trust Company (ABA #0210-01033)
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance
Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment to be addressed, Attention:
Investment Operations, Fax Number: (414) 299-5714.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY $17,000,000
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: MassMutual Long Term Pool Account Number
4067-3488
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance
Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments, to be addressed
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-2
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $3,000,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
4 Chase MetroTech Center
New York, New York 10081
for credit to: MassMutual Pension Management Account No.
910-2594018
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance
Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments, to be addressed
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-3
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY $11,376,654
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 014752
OBI PFGSE (S) B0061666 () [Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3]
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Re: Bond No. B0061666
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 42-0127290
A-4
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY $7,123,346
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 014752
OBI PFGSE (S) B0061666 () [Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3]
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Re: Bond No. B0061666
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 42-0127290
A-5
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
COMMERCIAL UNION LIFE INSURANCE COMPANY $1,500,000
OF AMERICA
c/o Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department-Securities
Jon Davidson
Telefacsimile: (515) 248-2490
Confirmation: (515) 247-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
CoreStates Bank (Philadelphia)
1500 Market Street
Philadelphia, PA 19102-2509
ABA #031-0000-11
OBI PFGSE(S) B0061666
For Credit to Commercial Union Life Insurance Company of
America/Principal Account No. 060073-02-4
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 04-2235236
A-6
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE TRAVELERS INSURANCE COMPANY $9,000,000
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Securities Department Private
Placement Division 10PB
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, New York 10004
for credit to: The Travelers Insurance Company
Consolidated Private Placement Account Number 910-2-587434
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed Attention:
Cashier_ Securities Department 10PB.
Name of Nominee in which Notes are to be issued: TRAL & CO.
Taxpayer I.D. Number: 06-0566090
A-7
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE TRAVELERS LIFE AND ANNUITY COMPANY $2,000,000
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Securities Department Private
Placement Division 10PB
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, New York 10004
for credit to: The Travelers Life and Annuity Company
Consolidated Private Placement Account Number 910-2-587434
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed Attention:
Cashier-Securities Department 10PB.
Name of Nominee in which Notes are to be issued: TRAL & CO.
Taxpayer I.D. Number: 06-0904249
A-8
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
RELIASTAR LIFE INSURANCE COMPANY $4,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
U.S. Bank N.A./Mpls.
601 2nd Avenue South
Minneapolis, Minnesota
ABA #091000022
Account Name: ReliaStar Life Insurance Co.
Account #1102-4001-4461
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon, Maturity and P&I Breakdown
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
A-9
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHERN LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5773
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
U.S. Bank N.A./Mpls.
ABA #091000022
601 2nd Avenue South
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Northern Life Insurance Company
Account #1602-3237-6105
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
A-10
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
RELIASTAR UNITED SERVICES LIFE $2,000,000
INSURANCE COMPANY
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Bankers Trust
New York, New York
ABA #021001033
A/C #99000739
FBO ReliaStar United Service Life Ins
Account #92574
Ref: Cusip, Security Description, Principal Amount,
Interest Amount
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: SALKELD & CO.
Taxpayer I.D. Number: 53-0159267
A-11
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
SECURITY CONNECTICUT LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank
New York, New York
ABA #021-000-021
Beneficiary Account #544755102
Reference: Sigler & Co., Tax I.D. #13-3641527
F/C #G54426
Ref: Cusip, Security Description, Principal Amount,
Interest Amount
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above and any written notices to Bank
for payment collection to:
Sigler & Co.
c/o Chase Manhattan Bank
Dept. #3492
P.O. Box 50000
Newark, New Jersey 07101-8006
Name of Nominee in which Notes are to be issued: SIGLER & CO.
Taxpayer I.D. Number: 35-1468921
A-12
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
AMERICAN UNITED LIFE INSURANCE COMPANY $2,000,000
One American Square $2,000,000
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Christopher D. Pahlke, Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3" and identifying
the breakdown of principal and interest and the payment date) to:
Bank of New York
Attention: P&I Department
One Wall Street, 3rd Floor
Window A
New York, New York 10286
ABA #021000018, BNF:IOC566
Account #186683/AUL
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
A-13
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PROVIDENT MUTUAL LIFE INSURANCE COMPANY $4,000,000
P.O. Box 1717
Valley Forge, Pennsylvania 19482-1717
Attention: Securities Investment Department
Telefacsimile: (610) 407-1322
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
PNC Bank (ABA #031-000-053)
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
for credit to: Provident Mutual Life Insurance Company
Account Number 85-4084-2176
Notices
All notices and communications requiring overnight express
delivery service should be addressed to:
1205 Westlakes Drive
Berwyn, PA 19312-2405
Attention: Treasurer
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 23-0990450
A-14
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first
Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or
equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of
the Company.
"Asset Disposition Prepayment Date" is defined in
Section 10.9(b).
"Asset Disposition Prepayment Notice" is defined in
Section 10.9(b).
"Asset Sale Prepayment Amount" is defined in Section
10.9(b).
"Business Day" means (a) for the purposes of Section 8.7
only, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to
be closed, and (b) for the purposes of any other provision of
this Agreement, any day other than a Saturday, a Sunday or a day
on which commercial banks in Houston, Texas or New York, New York
are required or authorized to be closed.
"Capitalized Lease" means any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Company" means Oceaneering International, Inc., a
Delaware corporation.
"Company Notice" is defined in Section 8.3.
"Confidential Information" is defined in Section 20.
"Consolidated Adjusted Net Worth" means as of the date of
any determination thereof Consolidated Net Worth excluding, to
the extent included in the determination of Consolidated Net
Worth, any translation gains or losses affecting cumulative
foreign currency translation adjustments as determined in
accordance with GAAP.
"Consolidated EBITDA" for any period means the sum of
(a)(i) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (ii) all
provisions for any Federal, state or local income taxes made by
the Company and its Restricted Subsidiaries during such period,
(iii) all provisions for depreciation and amortization (other
than amortization of debt discount) made by the Company and its
Restricted Subsidiaries during such period, (iv) any other
non-cash charge to the extent such non-cash charge reduces
Consolidated Net Income (as reduced by any adjustment for the
amount of cash pay-outs of non-cash charges from prior fiscal
periods), and (v) Consolidated Interest Expense during such
period, minus (b) any gains or losses on the sale or other
disposition of Investments or fixed or capital investments (other
than gains or losses in the ordinary course of business as
determined in accordance with GAAP), and any taxes on such
excluded gains and any tax deductions or credits on account of
any such excluded losses, all determined on a consolidated basis
in accordance with GAAP.
"Consolidated EBITDA Available for Fixed Charges" for any
period means the sum of (a) Consolidated EBITDA during such
period plus (to the extent not included in determining
Consolidated EBITDA) (b) one-third of all Rentals (other than
Rentals on Capitalized Leases) payable during such period by the
Company and its Restricted Subsidiaries pursuant to Long-Term
Leases.
"Consolidated Fixed Charges" for any period means on a
consolidated basis the sum of (a) one-third of all Rentals (other
than Rentals on Capitalized Leases) payable during such period by
the Company and its Restricted Subsidiaries pursuant to Long-Term
Leases, and (b) Consolidated Interest Expense payable during such
period.
"Consolidated Indebtedness" means all Indebtedness of the
Company and its Restricted Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
B-2
"Consolidated Interest Expense" means for any period all
interest (including the interest component on Rentals on
Capitalized Leases) and all amortization of debt discount and
expense on any particular Indebtedness (including, without
limitation, payment-in-kind, zero coupon and other like
Securities) of the Company and its Restricted Subsidiaries for
which such calculations are being made as determined in
accordance with GAAP. Computations of Consolidated Interest
Expense on a pro-forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination.
"Consolidated Net Income" for any period means the gross
revenues of the Company and its Restricted Subsidiaries for such
period less all expenses and other proper charges (including
taxes on income), determined on a consolidated basis after
eliminating earnings or losses attributable to outstanding
Minority Interests, but excluding in any event:
(a) the proceeds of any life insurance policy;
(b) net earnings and losses of any Restricted
Subsidiary accrued prior to the date it became a Restricted
Subsidiary;
(c) net earnings and losses of any corporation (other
than a Restricted Subsidiary), substantially all the assets
of which have been acquired in any manner by the Company or
any Restricted Subsidiary, realized by such corporation
prior to the date of such acquisition;
(d) net earnings and losses of any corporation (other
than a Restricted Subsidiary) with which the Company or a
Restricted Subsidiary shall have consolidated or which shall
have merged into or with the Company or a Restricted
Subsidiary prior to the date of such consolidation or
merger;
(e) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest unless such
net earnings shall have actually been received by the
Company or such Restricted Subsidiary in the form of cash
distributions;
(f) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment
of dividends to the Company or any other Restricted
Subsidiary;
(g) earnings and losses resulting from any
reappraisal, revaluation, write-up or write-down of assets
other than in the ordinary course of business;
B-3
(h) any reversal of any contingency reserve to the
extent such contingency reserve was taken prior to the date
of the Closing, but including in any determination of
Consolidated Net Income changes in estimates made in
accordance with GAAP; and
(i) any other extraordinary gain or loss, including,
without limitation, the cumulative effect of changes to
GAAP.
"Consolidated Net Worth" means, as of the date of any
determination thereof the amount of the capital stock accounts
(net of treasury stock, at cost) plus (or minus in the case of a
deficit) the surplus in retained earnings of the Company and its
Restricted Subsidiaries as determined in accordance with GAAP.
"Consolidated Total Capitalization" means as of the date
of the end of the most recent prior fiscal quarter, the sum of
(a) Consolidated Indebtedness plus (b) Consolidated Adjusted Net
Worth.
"Credit Agreement" means the Amended and Restated Credit
Agreement dated June 12, 1996 with Morgan Guaranty Trust Company
of New York, as Agent, including any amendment or supplement
thereto and any (one or more) renewal, extension, replacement or
refunding thereof.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"Default Rate" means that rate of interest that is the
greater of (i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of the Notes or (ii) 2% over
the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York in New York City, New York as its "base" or
"prime" rate.
"Distribution" in respect of the Company and its
Restricted Subsidiaries means:
(a) dividends or other distributions on capital stock
(including, without limitation, preferred stock) of a
corporation (except dividends or other distributions payable
solely in shares of common stock of such corporation and
dividends of a Restricted Subsidiary to the Company); and
(b) redemption, acquisition or retirement of any
shares of its capital stock or warrants, rights or other
options to purchase any shares of its capital stock (other
than the redemption, acquisition or retirement of any shares
of capital stock of a Restricted Subsidiary by the Company
or a Restricted Subsidiary).
B-4
"Environmental Laws" means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or
the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems
applicable to such Person.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that is treated as a single employer together
with the Company under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"GAAP" means generally accepted accounting principles as
in effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any
properties of the Company or any Restricted Subsidiary,
or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation (other than
performance obligations (other than obligations for the payment
of borrowed money)) of any other Person in any manner, whether
directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or
otherwise, by such Person:
B-5
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other
Person or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of any other
Person to make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness
or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of
the obligor under any Guaranty, the Indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic
or hazardous wastes or any other substances, including all
substances listed in or regulated in any Environmental law that
might pose a hazard to health or safety, the removal of which may
be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, regulated,
prohibited or penalized by any applicable law (including, without
limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by
the Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any
time, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capitalized Leases;
B-6
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable
for such liabilities);
(e) all its liabilities in respect of standby letters
of credit or instruments serving a similar function issued
or accepted for its account by banks and other financial
institutions (other than those representing obligations for
performance guarantees);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities (other than performance guaranties) of a type
described in any of clauses (a) through (f) hereof;
provided, that in the case of computations of "Indebtedness" of
the Company or any Restricted Subsidiary, notwithstanding clause
(d) hereof, "Indebtedness" shall not include Indebtedness
secured by Liens permitted under Section 10.7(h).
"Institutional Investor" means (a) any original purchaser
of a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and
(c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless of
legal form.
"Investments" shall mean all investments, in cash or by
delivery of property, made directly or indirectly in any property
or assets or in any Person, whether by acquisition of shares of
capital stock, Indebtedness or other obligations or Securities or
by loan, advance, capital contribution or otherwise; provided
that "Investments" shall not mean or include routine
investments in property to be used or consumed in the ordinary
course of business.
"Lien" means any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the common
law, statute or contract, and including but not limited to the
security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances (including, with respect
to stock, stockholder agreements, voting trust agreements, buy-
back agreements and all similar arrangements) affecting property.
For the purposes of this Agreement, the Company or a Subsidiary
shall be deemed to be the owner of any property which it has
B-7
acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall
constitute a Lien.
"Long-Term Lease" means any lease of real or personal
property (other than a Capitalized Lease) having an original
term, including any period for which the lease may be renewed or
extended at the option of the lessor, of more than one year.
"Make-Whole Amount" is defined in Section 8.7.
"MARAD Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary owed to, or guaranteed by, the U.S.
Maritime Administration and incurred in connection with the
acquisition or purchase of fixed assets useful and intended to be
used in carrying on the business of the Company or a Restricted
Subsidiary, provided that with respect to such Indebtedness, none
of the property or assets of the Company or any Restricted
Subsidiary, other than the fixed asset so acquired, shall be,
directly or indirectly, liable for or secure in any manner
whatsoever the payment thereof.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets or properties of
the Company and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect
on (a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the
Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interests" means any shares of stock of any
class of a Restricted Subsidiary (other than directors'
qualifying shares or Regulatory Shares as required by law) that
are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary
or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred
stock.
B-8
"Multiemployer Plan" means any Plan that is a
"multiemployer plan" (as such term is defined in
Section 4001(a)(3) of ERISA).
"Net Proceeds" is defined in Section 10.9(b).
"Non-U.S. Pension Plan" means any plan, fund, or other
similar program established or maintained outside the United
States of America by the Company or any one or more of the
Subsidiaries primarily for the benefit of employees of the
Company or such Subsidiaries residing outside the United States
of America, which plan, fund or other similar program provides
for retirement income for such employees or a deferral of income
for such employees in contemplation of retirement and is not
subject to ERISA or the Code.
"Noteholder Notice" is defined in Section 8.3(a).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such
certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation,
joint venture, limited liability company, association, trust,
unincorporated organization, or a government or agency or
political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in
Section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
"Priority Liability" means, as of the date of any
determination thereof, (a) any Indebtedness of the Company
secured by a Lien created pursuant to Section 10.7(l) hereof and
B-9
(b) any Indebtedness and any Preferred Stock of Restricted
Subsidiaries other than Indebtedness or Preferred Stock permitted
under Section 10.5(a)(ii).
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"Proposed Prepayment Date" is defined in Section 8.3(c).
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Regulatory Shares" means, with respect to any Person,
shares of the capital stock of such Person required to be issued
as qualifying shares to directors or shares issued to Persons
other than Company in response to regulatory requirements of
foreign jurisdictions pursuant to a resolution of the Board of
Directors of such Person.
"Required Holders" means, at any time, the holders of at
least 50% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any
of its Affiliates).
"Responsible Officer" means any Senior Financial Officer
and any other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement.
"Rentals" means and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
the Company or a Restricted Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of
the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Restricted Investments" shall mean all Investments, other
than:
(a) Investments by the Company and its Restricted
Subsidiaries in and to Wholly-owned Restricted Subsidiaries,
including any Investment in a corporation which, after
giving effect to such Investment, will become a Wholly-owned
Restricted Subsidiary;
(b) Investments representing loans or advances in the
usual and ordinary course of business to officers and
B-10
employees for expenses incidental to carrying on the
business of the Company or any Restricted Subsidiary;
(c) Investments in property or assets to be used in
the ordinary course of the business of the Company and its
Restricted Subsidiaries as described in Schedule C of this
Agreement;
(d) Investments in commercial paper of corporations
organized under the laws of the United States or any state
thereof and loan participations maturing in 270 days or less
from the date of issuance which, at the time of acquisition
by the Company or any Restricted Subsidiary, is accorded a
rating of _A-1_ or better by Standard & Poor's Ratings
Group, a division of McGraw-Hill, Inc., a New York
corporation, or _ P-1_ or better by Moody's Investors
Service, Inc.;
(e) Investments in direct obligations of the United
States of America or any agency or instrumentality of the
United States of America, the payment or guarantee of which
constitutes a full faith and credit obligation of the United
States of America, in either case, maturing within twelve
months from the date of acquisition thereof;
(f) Investments in direct obligations of other
governments maturing within twelve months from the date of
acquisition thereof by the Company or a Restricted
Subsidiary, provided that at the time of such acquisition,
the long-term Indebtedness of such government is rated
"AAA" by Standard & Poor's Ratings Group or by Moody's
Investor's Service, Inc.;
(g) Investments in certificates of deposit and time
deposits maturing within one year from the date of issuance
thereof, issued by a bank or trust company organized under
the laws of the United States or any State thereof, having
either (i) capital, surplus and undivided profits
aggregating at least $100,000,000 or (ii) total assets of
$1,000,000,000;
(h) Investments in repurchase agreements with respect
to any Security described in clause (e) entered into with a
depository institution or trust company acting as principal
described in clause (g) if such repurchase agreements:
(i) are by their terms to be performed by the repurchase
obligor and such repurchase agreements are deposited with a
bank or trust company of the type described in clause (g)
and (ii) mature within ninety days from the date of
execution and delivery thereof; and
(i) Investments of the Company not described in the
foregoing clauses (a) through (h); provided that the
aggregate amount of all such Investments shall not at the
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time any Investment is made within the limitations of this
clause (i) exceed 15% of Consolidated Adjusted Net Worth.
"Restricted Subsidiary" means any Subsidiary which is not
a Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Security" shall have the same meaning as in Section 2(1)
of the Securities Act.
"Senior Financial Officer" means the chief executive
officer, chief financial officer, principal accounting
officer, treasurer or controller of the Company.
"Senior Indebtedness" shall mean all Indebtedness for
borrowed money of the Company which is not expressed to be
subordinate or junior in rank to any other Indebtedness for
borrowed money of the Company.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors
(or Persons performing similar functions) of such entity, and any
partnership, limited liability company or joint venture if more
than a 50% interest in the profits or capital thereof or assets
upon dissolution is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one
or more of its Subsidiaries). Unless the context otherwise
clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Subsidiary Stock" is defined in Section 10.9(c).
"Swaps" means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For
the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case,
the amount of such obligation shall be the net amount so
determined.
B-12
"Unrestricted Subsidiary" means any Subsidiary designated
by the Board of Directors as an "Unrestricted Subsidiary" on
Schedule 5.4 or pursuant to Section 10.13.
"Voting Stock" means Securities of any class or classes,
the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
"Wholly-owned Restricted Subsidiary" means, at any time,
any Restricted Subsidiary one hundred percent (100%) of all of
the equity interests (except directors' qualifying shares and
shares of a capital stock owned by one or more individuals who
are not citizens of the United States of America and whose
ownership of such capital stock is mandated by the law of any
country other than the United States of America) and voting
interests of which are owned by any one or more of the Company
and the Company's other Wholly-owned Restricted Subsidiaries at
such time.
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SCHEDULE C
EXISTING INVESTMENTS
50% ownership of Oceanteam A/S
49% ownership of Norsk Subsea Cabel A/S
49% ownership of Solus Emirates
SCHEDULE 5.4
RESTRICTED SUBSIDIARIES, AFFILIATES AND DIRECTORS AND
SENIOR OFFICERS OF THE COMPANY
PERCENTAGE OF OWNERSHIP BY JURISDICTION
OCEANEERING INTERNATIONAL,INC. OF
AND RESTRICTED SUBSIDIARIES ORGANIZATION
RESTRICTED SUBSIDIARY
Oceaneering Australia Pty. 100% Australia
Limited
Oceaneering FSC, Inc. 100% Barbados
Marine Production Systems do 100% Brazil
Brasil Ltda.
Marine Production Systems 100% Brazil
Servicos Ltda.
Monocean Oceaneering 100% Brazil
Engenharia Submarina Ltda.
Ocean Systems do Brasil 100% Brazil
Servicos Subacquaticos, Ltda.
Oceaneering do Brasil 100% Brazil
Servicos Submarinos, Ltda.
Oceaneering Limited 100% Canada
Solus Offshore, Ltd. 100% Cayman Islands
Servicos Marinos Oceaneering 100% Chile
Chile Ltda.
Eastport International, Inc. 100% Delaware
Marine Production Systems, 100% Delaware
Ltd.
Oceaneering Space Systems, 100% Delaware
Inc.
Oceaneering Survey, Inc. 100% Delaware
Oceaneering Technologies, 100% Delaware
Inc.
Solus Ocean Systems, Inc. 100% Delaware
Ocean Systems Engineering 100% England
Limited
Oceaneering International 100% England
Services Limited
Solus Schall Limited 100% England
Oceaneering International (M) 100% Malaysia
Sdn. Bhd.
Oceaneering International, 100% Mexico
S.A. de C.V.
Oceaneering International 100% Netherlands
(Netherlands) B.V.
Oceaneering Services 100% Nigeria
(Nigeria) Limited
Oceaneering A/S 100% Norway
UEC 789 Limited 100% Scotland
Multiflex Limited 100% Scotland
Oceaneering International 100% Sharjah
(Sharjah) Limited
Oceaneering International Pte 100% Singapore
Ltd
Oceaneering International AG 100% Switzerland
Oceaneering Underwater GmbH 100% Switzerland
Multiflex, Inc. 100% Texas
Ocean Systems Engineering, 100% Texas
Inc.
Oil Industry Engineering, 100% Texas
Inc.
Specialty Wire and Cable 100% Texas
Company, Inc.
Oceaneering Geoscience Ltd. 100% United Kingdom
Steadfast Oceaneering, Inc. 100% Virginia
P. T. Calmarine 50% Indonesia
Solus Schall (Nigeria) 50% Nigeria
Limited
Oceaneering Arabia Ltd. 50% Saudi Arabia
Ocean Marine & Communications 49% Thailand
Systems Ltd.
Solus Oceaneering (Malaysia) 49% Malaysia
Sdn. Bhd.
* Remainder held by local
nominee and effectively
controlled by Oceaneering.
AFFILIATES, OTHER THAN
SUBSIDIARIES
Oceanteam A/S 50% Norway
Norsk Subsea Cabel A/S 49% Norway
Solus Emirates 49% Qatar
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DIRECTORS AND SENIOR
OFFICERS
Name Position
Charles B. Evans Director
David S. Hooker Director
John R. Huff Chairman, President and
Chief Executive Officer
D. Michael Hughes Director
Harris J. Pappas Director
T. Jay Collins Executive Vice President
Marvin J. Migura Sr. Vice President and
Chief Financial Officer
George R. Haubenreich, Jr. Vice President, General Counsel
& Secretary
Robert P. Mingoia Treasurer
Bruce Crager Senior Vice President
Oceaneering Production Systems
M. Kevin McEvoy Vice President - Integrated Services
-3-
SCHEDULE 5.5
FINANCIAL STATEMENTS
Annual Report to shareholders for the 1998 fiscal year _
containing Form 10-K for the year ended March 31, 1998.
Annual Report to shareholders for the 1997 fiscal year _
containing Form 10-K for the year ended March 31, 1997.
Quarterly Report on Form 10-Q for the quarterly periods
ended June 30, 1998 and December 31, 1997.
SCHEDULE 5.14
USE OF PROCEEDS
GROSS PROCEEDS
$100,000,000
Agency Fee - Chase Securities 1,000,000
Repayment of outstanding principal under the 78,000,000
Credit Agreement
Estimated legal fees and other expenses 300,000
Total Applications 79,300,000
Available for General Corporate Purposes $20,700,000
SCHEDULE 5.15
EXISTING INDEBTEDNESS
Credit Agreement 78,000,000
Capital Lease _ IBM Credit Corporation 815,095
78,815,095
LIENS EXISTING ON THE DATE OF CLOSING
Cash Restricted and acting as $1,513,000
security in legal proceedings in
the United Kingdom, 900,000 Pounds
Sterling at $1.681
SCHEDULE 8.3
EXISTING AFFILIATES
JURISDICTION OF
AFFILIATED COMPANIES ORGANIZATION
Oceaneering Australia Pty. Limited Australia
Oceaneering FSC, Inc. Barbados
Marine Production Systems do Brasil Ltda. Brazil
Marine Production Systems Servicos Ltda. Brazil
Monocean Oceaneering Engenharia Submarina Brazil
Ltda.
Ocean Systems do Brasil Servicos Brazil
Subacquaticos, Ltda.
Oceaneering do Brasil Servicos Submarinos, Brazil
Ltda.
Oceaneering Limited Canada
Solus Offshore, Ltd. Cayman Islands
Servicos Marinos Oceaneering Chile Ltda. Chile
Eastport International, Inc. Delaware
Marine Production Systems, Ltd. Delaware
Oceaneering Space Systems, Inc. Delaware
Oceaneering Survey, Inc. Delaware
Oceaneering Technologies, Inc. Delaware
Solus Ocean Systems, Inc. Delaware
Ocean Systems Engineering Limited England
Oceaneering International Services Limited England
Solus Schall Limited England
Oceaneering International (M) Sdn. Bhd. Malaysia
Oceaneering International, S.A. de C.V. Mexico
Oceaneering International (Netherlands) B.V. Netherlands
Oceaneering Services (Nigeria) Limited Nigeria
Oceaneering A/S Norway
UEC 789 Limited Scotland
Multiflex Limited Scotland
Oceaneering International (Sharjah) Limited Sharjah
Oceaneering International Pte Ltd Singapore
Oceaneering International AG Switzerland
Oceaneering Underwater GmbH Switzerland
Multiflex, Inc. Texas
Ocean Systems Engineering, Inc. Texas
Oil Industry Engineering, Inc. Texas
Specialty Wire and Cable Company, Inc. Texas
Oceaneering Geoscience Ltd. United Kingdom
Steadfast Oceaneering, Inc. Virginia
P. T. Calmarine Indonesia
Solus Schall (Nigeria) Limited Nigeria
Oceaneering Arabia Ltd. Saudi Arabia
Ocean Marine & Communications Systems Ltd. Thailand
Solus Oceaneering (Malaysia) Sdn. Bhd. Malaysia
Oceanteam A/S Norway
Norsk Subsea Cabel A/S Norway
Solus Emirates Qatar
DIRECTORS AND EXECUTIVE OFFICERS
Name
Position
Charles B. Evans Director
David S. Hooker Director
John R. Huff Chairman,
President and Chief
Executive Officer
D. Michael Hughes Director
Harris J. Pappas Director
T. Jay Collins Executive Vice
President
Marvin J. Migura Sr. Vice President and
Chief Financial Officer
George R. Haubenreich, Jr. Vice President, General
Counsel & Secretary
Bruce Crager Senior Vice President,
Oceaneering Production
Systems
M. Kevin McEvoy Vice President-Integrated
Services
-2-
FORM OF NAIC CERTIFICATE
YEAR 2000 DUE DILIGENCE NOTICE
As part of its credit assessment procedures for not-rated
securities, the Securities Valuation Office has an obligation to
conduct due diligence on the obligor of each security before it
can assign the security an NAIC Designation. The Securities
Valuation Office has become increasingly aware in recent months
of the need to assess a company's Year 2000 preparedness as part
of this due diligence. The Securities Valuation Office has,
therefore, drafted a series of questions relating to Year 2000
compliance to be answered by the issuers/obligors of all
not-rated securities filed with the Securities Valuation Office.
Please include a response to this questionnaire with each initial
or annual update submission to the Securities Valuation Office of
securities not rated by an NRSRO. If a response is not included
as part of the submission, the filer will be contacted and asked
for the response before the submission can be assigned an NAIC
Designation for the current year.
YEAR 2000 (Y2K) DUE DILIGENCE QUESTIONS
1. What is the company doing to prepare its internal
computer systems and software for the year 2000?
2. What is the company doing to prepare its internal
operating systems and equipment with embedded chip technology for
the year 2000?
3. Will the year 2000 problem effect the company's
products, services and/or business activities (e.g., disruption
of service or discontinuance of product lines)?
4. Who in the company is responsible for directing its year
2000 efforts and what has been the Board of Directors' role in
reviewing and approving the company's year 2000 plan?
5. What is the company's schedule for fixing and testing
its systems? Please identify any third party or industry-wide
testing in which the company plans to participate.
6. If the company does not plan to do all its year 2000
work itself, please identify whether any outside consultants or
vendors have been or will be employed to do all or part of the
work. If the company plans to obtain a certificate of year 2000
compliance from any outside organization, please identify.
7. What has the company done to survey its vendors,
suppliers, trading partners, service providers or other third
parties with whom it interacts to ascertain what their status is
with respect to year 2000 readiness?
8. What is the company's contingency plan if some or all of
the company's systems will not be remediated in time for the year
2000?
9. How do the company's costs to address the year 2000
problem affect its bottom line? Do these costs have a material
financial effect? Can I see something in the company's recent
reports or other public statements in which the company discusses
its approach to the year 2000 problem?
10. Even if the company does not believe that the costs or
potential effects of the year 2000 are material, can you tell me
how much the year 2000 problem will cost the company?
11. Please identify any additional insurance the company has
obtained, including any directors and officers personal liability
insurance, specifically for the year 2000 problem?
12. If your company is a manufacturer or supplier of any
hardware, software or equipment systems, what are your concerns
about the potential liabilities associated with the company's
products or services? What is your best assessment of corporate
exposure to legal actions arising from equipment or software
failures associated with the company's products or services?
-2-
[FORM OF NOTE]
OCEANEERING INTERNATIONAL, INC.
6.72% Senior NOTE due September 8, 2010
No. _________ Date
$____________ PPN 675232 A*3
FOR VALUE RECEIVED, the undersigned, OCEANEERING
INTERNATIONAL, INC. (herein called the " Company"), a
corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ________________, or
registered assigns, the principal sum of ________________ DOLLARS
on September 8, 2010, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 6.72% per annum from the date hereof,
payable semiannually, on the eighth day of March and September in
each year, commencing with the March 8 or September 8 next
succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on
any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase
Agreements referred to below), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand),
at a rate per annum from time to time equal to the greater of
(i) 8.72% or (ii) 2% over the rate of interest publicly announced
by Morgan Guaranty Trust Company of New York from time to time in
New York City, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money
of the United States of America at Chase Manhattan Bank in New
York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase
Agreements, dated as of September 1, 1998 (as from time to time
amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to
the benefits thereof. Each holder of this Note will be deemed,
by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set
forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration
of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder
hereof or such holder's attorney duly authorized in writing, a
new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase
Agreements. This Note is also subject to optional prepayment, in
whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole Amount)
and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance
with, and the rights and parties shall be governed by, the law of
the State of New York, excluding choice-of-law principles of the
law of such State which would require application of the laws of
the jurisdiction other than such State.
OCEANEERING INTERNATIONAL, INC.
By ______________________________
Title
E-1-2