0000950129-01-503025.txt : 20011008
0000950129-01-503025.hdr.sgml : 20011008
ACCESSION NUMBER: 0000950129-01-503025
CONFORMED SUBMISSION TYPE: S-3
PUBLIC DOCUMENT COUNT: 9
REFERENCES 429: gov.sec.edgar.dataobjects.object.PDSubFN429Data@4dfc066d
FILED AS OF DATE: 20010917
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MCDERMOTT INTERNATIONAL INC
CENTRAL INDEX KEY: 0000708819
STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443]
IRS NUMBER: 720593134
STATE OF INCORPORATION: R1
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69474
FILM NUMBER: 1738053
BUSINESS ADDRESS:
STREET 1: 1450 POYDRAS ST
CITY: NEW ORLEANS
STATE: LA
ZIP: 70112
BUSINESS PHONE: 5045875400
MAIL ADDRESS:
STREET 1: 1450 POYDRAS ST
CITY: NEW ORLEANS
STATE: LA
ZIP: 70161
S-3
1
h90172s-3.txt
MCDERMOTT INTERNATIONAL INC
1
As filed with the Securities and Exchange Commission on September 14, 2001
Registration No. 333-
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MCDERMOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 1450 POYDRAS STREET 72-0593134
(State or other jurisdiction NEW ORLEANS, LOUISIANA 70112-6050 (I.R.S. Employer Identification
of incorporation or organization) (504) 587-5400 No.)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
BRUCE F. LONGAKER
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
1450 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112-6050
(504) 587-5400
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------
Copy to:
TED W. PARIS
BAKER BOTTS L.L.P.
3000 ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002-4995
(713) 229-1838
FAX: (713) 229-1522
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this registration statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
----------
CALCULATION OF REGISTRATION FEE
======================================================================= =============================== ======================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
======================================================================= =============================== ======================
Debt Securities(3)................................................
----------------------------------------------------------------------- ------------------------------- ----------------------
Common Stock, par value $.01 per share(3).........................
----------------------------------------------------------------------- ------------------------------- ----------------------
Preferred Stock, par value $.01 per share(3)......................
----------------------------------------------------------------------- ------------------------------- ----------------------
Warrants(3).......................................................
----------------------------------------------------------------------- ------------------------------- ----------------------
Total............................................................. $300,000,000 $75,000
======================================================================= =============================== ======================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). The aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement will not exceed $300,000,000 or the equivalent thereof in
foreign currencies, foreign currency units or composite currencies. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(2) Pursuant to Rule 457(p), the Registrant hereby offsets the registration
fee required in connection with this Registration Statement by $29,467
previously paid on July 2, 1998 by the Registrant in connection with
its registration statement on Form S-4 (Registration No. 333-58459),
which was withdrawn on February 9, 2000 prior to being declared
effective. Accordingly, $45,533 is being paid in connection with this
Registration Statement.
(3) There are being registered hereunder an indeterminate principal amount
of Debt Securities, an indeterminate number of shares of Common Stock
and Preferred Stock and an indeterminate number of Warrants, including
Debt Securities, Common Stock, Preferred Stock and Warrants issuable on
conversion, redemption, repurchase, exchange or exercise of the Debt
Securities, Preferred Stock or Warrants registered hereunder or
pursuant to any applicable antidilution provisions. If any Debt
Securities are issued at an original issue discount, then the principal
amount of such Debt Securities being registered hereunder shall be such
principal amount as shall result in an aggregate initial offering price
of up to $300,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
================================================================================
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SUBJECT TO COMPLETION, DATED SEPTEMBER 14, 2001
PROSPECTUS
[Logo]
MCDERMOTT INTERNATIONAL, INC.
1450 Poydras
New Orleans, Louisiana 70112-6050
(504) 587-5400
$300,000,000
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5.
We will provide additional terms of our securities in one or more supplements to
this prospectus. You should read this prospectus and the related prospectus
supplement carefully before you invest in our securities. No person may use this
prospectus to offer and sell our securities unless a prospectus supplement
accompanies this prospectus.
-------------------------
THE OFFERING
We may offer from time to time:
o senior debt securities;
o subordinated debt securities;
o preferred stock;
o common stock; and
o warrants.
Our common stock is listed on the New York Stock
Exchange under the symbol "MDR."
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
The date of this prospectus is 2001.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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TABLE OF CONTENTS
About This Prospectus.............................................................................................2
About McDermott International, Inc................................................................................3
Risk Factors......................................................................................................5
Forward-Looking Information......................................................................................13
Use of Proceeds..................................................................................................15
Ratio of Earnings to Fixed Charges...............................................................................15
Description of Debt Securities...................................................................................16
Description of Capital Stock.....................................................................................23
Description of Warrants..........................................................................................28
Plan of Distribution.............................................................................................29
Legal Opinions...................................................................................................31
Experts..........................................................................................................31
Where You Can Find More Information..............................................................................31
Enforceability of Civil Liabilities..............................................................................32
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission under a "shelf" registration
process. Using this process, we may offer the securities this prospectus
describes in one or more offerings with a total initial offering price of up to
$300,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we use this prospectus to offer securities,
we will provide a prospectus supplement and, if applicable, a pricing
supplement. The prospectus supplement and any pricing supplement will describe
the specific terms of that offering. The prospectus supplement and any pricing
supplement may also add to, update or change the information this prospectus
contains. Please carefully read this prospectus, the prospectus supplement and
any pricing supplement, in addition to the information contained in the
documents we refer to under the heading "Where You Can Find More Information."
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ABOUT MCDERMOTT INTERNATIONAL, INC.
McDermott International, Inc. ("McDermott") was incorporated under the
laws of the Republic of Panama in 1959 and is the parent company of the
McDermott group of companies, which includes:
o J. Ray McDermott, S.A. ("JRM"), a Panamanian subsidiary of
McDermott, and its consolidated subsidiaries;
o McDermott Incorporated ("MI"), a Delaware subsidiary of
McDermott, and its consolidated subsidiaries;
o Babcock & Wilcox Investment Company ("BWICO"), a Delaware
subsidiary of MI, and its consolidated subsidiaries;
o BWX Technologies, Inc. ("BWXT"), a Delaware subsidiary of
BWICO, and its consolidated subsidiaries; and
o The Babcock & Wilcox Company ("B&W"), an unconsolidated
Delaware subsidiary of BWICO.
We operate in four business segments:
o Marine Construction Services includes the results of
operations of JRM and its subsidiaries, which provide services
to customers in the offshore oil and gas exploration and
production and hydrocarbon processing industries and to other
marine construction companies. This segment's principal
activities include the design, engineering, fabrication and
installation of offshore drilling and production platforms and
other specialized structures, modular facilities, marine
pipelines and subsea production systems and procurement
activities. This segment also provides comprehensive project
management services, feasibility studies, procurement
activities, and removal, salvage and refurbishment services
for offshore fixed platforms. This segment operates throughout
the world in most major offshore oil and gas producing
regions, including the Gulf of Mexico, the North Sea, West
Africa, South America, the Middle East, India and the Far
East.
o Government Operations includes the results of operations of
BWXT. This segment is the sole supplier of nuclear fuel
assemblies and major nuclear reactor components to the U.S.
Navy for the Naval Reactors Program and provides services to
the U.S. Government, including uranium processing,
environmental site restoration services and management and
operating services for various U.S. Government-owned
facilities, primarily within the nuclear weapons complex of
the U.S. Department of Energy.
o Industrial Operations includes the results of operations of
McDermott Engineers & Constructors (Canada) Ltd., Hudson
Products Corporation and McDermott Technologies, Inc.
McDermott Engineers & Constructors (Canada) Ltd. provides
project management, conceptual and process design, front-end
engineering and design, detailed engineering, procurement,
construction management and contract maintenance services to
customers in a wide range of industries, including the oil and
gas, power generation, industrial, civil and marine
construction, petrochemical and pulp and paper industries. We
are in process of negotiating the sale of McDermott Engineers
& Constructors (Canada) Ltd. and some related operations. We
expect to complete that sale this Fall. Hudson Products
Corporation supplies air-cooled heat exchangers and other
manufactured products for industrial process systems.
McDermott Technologies, Inc. performs research activities for
our other segments and markets and negotiates and administers
research and development contracts with third parties.
o Power Generation Systems includes the results of operations of
our Power Generation Group, which is conducted primarily
through B&W and its subsidiaries. This segment provides a
variety
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of services, equipment and systems to generate steam and
electric power at energy facilities worldwide. This segment's
activities include the following:
o providing engineered-to-order services, products and
systems for energy conversion worldwide and related
industrial equipment, such as burners, pulverizer
mills, soot blowers and ash handlers;
o manufacturing heavy-pressure equipment for energy
conversion, such as boilers fueled by coal, oil,
bitumen, natural gas, solid municipal waste, biomass
and other fuels;
o fabricating steam generators for nuclear power
plants;
o designing and supplying environmental control
systems, including both wet and dry scrubbers for
flue gas desulfurization, modules for selective
catalytic reduction of nitrogen oxides and
electrostatic precipitators and similar devices;
o supporting operating plants with a wide variety of
services, including the installation of new systems
and replacement parts, engineering upgrades,
construction, maintenance and field technical
services such as condition assessments;
o providing inventory services to help customers
respond quickly to plant interruptions and assist
construction crews in maintaining and repairing
operating equipment; and
o providing power through cogeneration, refuse-fueled
power plants and other independent power-producing
facilities.
Due to B&W's Chapter 11 filing, effective February 22, 2000, we no
longer consolidate the results of operations of B&W and its subsidiaries in our
consolidated financial statements.
In this prospectus, we refer to McDermott International, Inc., its
wholly owned and majority-owned subsidiaries and its ownership interest in
equity affiliates as "we" or "us," unless we specifically state otherwise or the
context indicates otherwise. Our principal executive offices are located at 1450
Poydras Street, New Orleans, Louisiana, and our telephone number at that
location is (504) 587-5400.
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RISK FACTORS
You should carefully consider the following matters, in addition to the
other information we have provided in this prospectus, the accompanying
prospectus supplement and the documents we incorporate by reference, before
reaching a decision regarding an investment in our securities. The risks and
uncertainties we describe below are not the only ones relating to these
securities or facing our company. Additional risks and uncertainties not
presently known to us or that we currently do not believe are material may also
impact our business, operations, financial condition or results of operations.
THERE IS SUBSTANTIAL UNCERTAINTY RELATING TO THE ULTIMATE OUTCOME OF THE B&W
CHAPTER 11 PROCEEDINGS. THESE PROCEEDINGS INVOLVE VARIOUS RISKS THAT COULD HAVE
A MATERIAL ADVERSE EFFECT ON US.
B&W's ability to continue as a going concern will depend on its ability
to resolve its ultimate asbestos exposure successfully. At the time of the
bankruptcy filing, our estimate of the liability of B&W and its subsidiaries for
pending and estimated future nonemployee products liability asbestos claims was
approximately $1.3 billion, and our estimate of the related insurance recoveries
was approximately $1.15 billion. Although we continue to believe that B&W's
provision for estimated asbestos liabilities is adequate to resolve asbestos
claims against it and its subsidiaries in the future, we nevertheless believe
that an early, overall settlement of these anticipated claims, as B&W's proposed
plan of reorganization contemplates, would be advantageous to our company. In
this connection, we believe that the asbestos claims substantially detract from
the actual and perceived value of our company. The asbestos claims and the B&W
Chapter 11 proceedings are a distraction to our management, and they represent
an uncertainty in the financial marketplace. Until the uncertainty is resolved,
we may be unable to deliver to our shareholders the maximum value potentially
available to them through our operations and businesses, taken as a whole. We
can provide no assurance that B&W's proposed plan of reorganization will be
approved by the Bankruptcy Court.
There are a number of issues and matters to be resolved in connection
with the B&W Chapter 11 proceedings, including, among others, the following:
o the ultimate asbestos liability of B&W and its subsidiaries;
o the outcome of negotiations with the asbestos claimants
committee, the future claimants representative and other
participants in the Chapter 11, concerning, among other
things, the size and structure of a trust to satisfy the
asbestos liability and the means for funding that trust;
o the outcome of declaratory judgment actions filed by some of
our insurers and negotiations with our insurers as to
additional amounts of coverage available to B&W and its
subsidiaries and as to the participation of those insurers in
a plan to fund a settlement trust;
o the Bankruptcy Court's decisions relating to numerous
substantive and procedural aspects of the Chapter 11
proceedings, including the Court's periodic determinations as
to whether to extend the existing preliminary injunction that
prohibits asbestos liability lawsuits and other actions for
which there is shared insurance from being brought against
nonfiling affiliates of B&W, including MI, JRM and McDermott;
and
o the possible need for an extension of the three-year term of
the $300 million debtor-in-possession revolving credit and
letter of credit facility (the "DIP Credit Facility"), which
is scheduled to expire in February 2003, to accommodate the
issuance of letters of credit expiring after that date in
connection with new construction and other contracts on which
B&W intends to bid.
Any changes in (1) the estimates of B&W's nonemployee asbestos
liability and insurance recoverables and (2) the differences between the
proportion of those liabilities covered by insurance and that experienced in the
past, could result in material adjustments to B&W's financial statements and
could negatively impact our ability to realize our net investment in B&W of $187
million. In addition, in April 2001 B&W filed a declaratory judgment action in
its Chapter 11
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proceeding against MI, BWICO, BWXT, Hudson Products Corporation and McDermott
Technologies, Inc. seeking a judgment, among other things, that (1) B&W was not
insolvent at the time of, or rendered insolvent as a result of, a corporate
reorganization that we completed in the fiscal year ended March 31, 1999, which
involved B&W's cancellation of a $313 million note receivable and B&W's transfer
of all the capital stock of Hudson Products Corporation, Tracy Power, BWXT and
McDermott Technologies, Inc. to BWICO, and (2) the transfers are not voidable.
As an alternative, and only in the event that the Bankruptcy Court finds B&W was
insolvent at a pertinent time and the transactions are voidable under applicable
law, the action preserves B&W's claims against the defendants. The Bankruptcy
Court has permitted the asbestos claimants committee and the future claimants
representative in the Chapter 11 proceeding to intervene and proceed as
plaintiff-intervenors against the defendants and has realigned B&W as an
additional defendant in this action. The asbestos claimants committee and the
future claimants representative are asserting in this action, among other
things, that B&W was insolvent at the time of the transfers and that the
transfers should be voided. We believe that B&W was solvent at the time of the
transfers and the transfers are not voidable. However, if the declaratory
judgment action is decided against the defendants by the Bankruptcy Court, it
could have a material adverse effect on our consolidated financial position and
results of operations. The Bankruptcy Court has ruled that Louisiana law will
apply to the solvency issues in this action and has set a trial date of October
22, 2001 to determine B&W's solvency at the time of the corporate
reorganization.
THE B&W CHAPTER 11 PROCEEDINGS AND WEAK MARINE CONSTRUCTION SERVICES MARKETS
COULD ADVERSELY IMPACT OUR LIQUIDITY AND ACCESS TO CAPITAL.
As a result of the B&W bankruptcy filing, our access to cash flows of
B&W and its subsidiaries has been restricted. We believe that the bankruptcy
filing and the weak Marine Construction Services markets have contributed to the
reduction in our credit rating from Ba1 to Ba3 by Moody's Investor Service in
June 2000 and from BB+ to B by Standard & Poors in December 2000 and,
consequently, could adversely impact our access to capital. In addition, MI and
JRM and their respective subsidiaries are limited, as a result of covenants in
debt instruments, in their ability to transfer funds to McDermott and its other
subsidiaries through cash dividends or through unsecured loans or investments.
During the remainder of 2001, we will need to address several
significant issues concerning our liquidity and capital resources. These
include:
o Negative cash flows. We have incurred negative cash flows in
recent periods, including the first quarter of 2001. If we
do not maintain a positive cash flow position in the second
half of 2001, our liquidity and access to capital could become
further limited.
o Reduction in surety bond capacity. Our two surety companies
notified us in early 2001 that they are no longer willing
to issue bonds on our behalf. We obtain surety bonds in the
ordinary course of business of several of our operations to
secure contract bids and to meet the bonding requirements of
various construction and other contracts with customers. We
are currently canvassing the surety market to obtain
additional bonding capacity. Since we received the notice from
our surety companies, we have been satisfying most of our
bonding requirements by letters of credit and enhanced
contract terms and conditions. However, if we fail to obtain
replacement bonding capacity, our ability to secure customer
contracts and pursue additional projects in the future may be
materially adversely affected.
o Upcoming maturity of MI's 9.375% notes. MI's 9.375% notes,
which have an aggregate outstanding principal amount of $225
million, are scheduled to mature on March 15, 2002. In
addition to those notes, MI has other outstanding notes and
debt obligations with an aggregate principal amount of $92.2
million, of which $50 million is scheduled to mature in 2023.
MI currently has insufficient cash and other liquid resources
on hand to fund the repayment of its 9.375% notes. However, we
generated operating cash flow in excess of $40 million in the
quarter ended June 30, 2001, which gives us some confidence we
will be able to generate significant cash flows from
operations for the rest of this year and prior to March 2002.
We are also exploring other alternatives including asset sales
or encumbrances, early bond redemptions and potential
refinancing or extension of these notes. We expect these
efforts to be successful, however there is
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no assurance that MI's efforts to extend the maturity of or
refinance these notes will be successful. Further, MI's
ability to satisfy, extend or refinance these notes could be
significantly influenced by the results of the litigation
involving our corporate reorganization completed in the fiscal
year ended March 31, 1999. MI owns substantial subsidiaries
outside the B&W Chapter 11 proceedings, including BWXT, which
comprises our Government Operations segment, and Hudson
Products Corporation, which operates our heat exchanger
business. BWXT and Hudson Products Corporation are defendants
in the action brought in the Chapter 11 proceeding concerning
our corporate reorganization completed in the fiscal year
ended March 31, 1999, and our alternatives regarding these
subsidiaries may be limited until, and depending upon. a
resolution in our favor of the action seeking to void the
transfers. In addition, MI has a financial asset pursuant to a
stock purchase and sale agreement with McDermott (the
"Intercompany Agreement"). For the 2001 year, MI would be
entitled to $249.6 million on the exercise of all of its
rights under that agreement, which would generate tax of $87.3
million. MI does not currently intend to exercise its right to
sell under the Intercompany Agreement (although it may in the
future elect to do so). If we fail to generate sufficient cash
flow to repay these notes at maturity, and our extension or
refinancing alternatives do not materialize, MI will have to
consider exercising its rights under the Intercompany
Agreement, selling all or a part of one or more of its
operating subsidiaries, or some combination of these and other
alternatives. As a result, MI's inability to successfully
refinance or repay these notes could have a material adverse
impact on McDermott's liquidity, financial condition and
results of operations.
Our failure to address any of these matters satisfactorily could have a
material adverse effect on our financial condition and results of operations.
MCDERMOTT HAS SIGNIFICANT GUARANTEE OBLIGATIONS AND OTHER CONTINGENT CLAIM
EXPOSURES TO CREDITORS AND CUSTOMERS OF ITS SUBSIDIARIES, INCLUDING B&W AND
CERTAIN OF ITS SUBSIDIARIES.
In recent periods, McDermott has entered into credit arrangements to
support its operating subsidiaries and, in some cases, guaranteed or otherwise
become contingently liable for the credit arrangements and customer contractual
obligations of its subsidiaries. These exposures include the following:
o B&W letter of credit exposure. At the time of the B&W
bankruptcy filing, McDermott was a maker or a guarantor of
outstanding letters of credit aggregating approximately $146.5
million ($40.5 million at June 30, 2001) which were issued in
connection with the business operations of B&W and its
subsidiaries. At that time, MI and BWICO were similarly
obligated with respect to additional letters of credit
aggregating approximately $24.8 million which were issued in
connection with the business operations of B&W and its
subsidiaries. Although a permitted use of the DIP Credit
Facility is the issuance of new letters of credit to backstop
or replace these preexisting letters of credit, each of
McDermott, MI and BWICO has agreed to indemnify and reimburse
B&W and its filing subsidiaries for any customer draw on any
letter of credit issued under the DIP Credit Facility to
backstop or replace any such preexisting letter of credit for
which it has exposure and for the associated letter of credit
fees paid under the facility. As of June 30, 2001,
approximately $58 million in letters of credit have been
issued under the DIP Credit Facility to replace or backstop
these preexisting letters of credit.
o Co-obligor exposure under McDermott credit facility. McDermott
is a co-obligor under a $200 million credit facility for
McDermott, BWXT and Hudson Products Corporation (the
"McDermott Credit Facility") together with Hudson Products
Corporation and BWXT. Accordingly, to the extent either Hudson
Products Corporation or BWXT borrows or obtains letters of
credit under that facility, McDermott is liable for the
obligations owing to the lenders under the facility. As of
June 30, 2001, outstanding borrowings under the McDermott
Credit Facility aggregated $20.0 million and the outstanding
letters of credit issued under that facility aggregated $62.2
million. McDermott has pledged investment portfolio assets
having a fair market value of approximately $207.0 million as
of June 30, 2001 to secure its obligations under the McDermott
Credit Facility.
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o Other letter of credit exposure. In addition to its exposure
as a co-obligor under the McDermott Credit Facility, McDermott
is also a maker or a guarantor of outstanding letters of
credit issued under arrangements separate from the McDermott
Credit Facility in connection with the business operations of
Hudson Products Corporation and other affiliated companies. As
of June 30, 2001, the aggregate amount of the letters of
credit outstanding under those arrangements was approximately
$5.2 million.
o Indemnification obligations under surety arrangements.
McDermott has agreed to indemnify our two surety companies for
obligations of various subsidiaries of McDermott, including
B&W and several of its subsidiaries, under surety bonds issued
in connection with contract requirements. As of June 30, 2001,
the aggregate outstanding amount of surety bonds that were
guaranteed by McDermott and issued in connection with the
business operations of its subsidiaries was approximately
$222.7 million, of which $191.0 million related to the
business operations of B&W and its subsidiaries.
While we do not expect that any of these items will result in a
material amount of claims actually being made against McDermott, the possibility
of such claims exists. Furthermore, the existence of these arrangements may
adversely impact our flexibility in (1) addressing some of the liquidity issues
we describe in the immediately preceding risk factor discussion and (2)
accessing new capital resources to address liquidity issues or other needs for
capital that may arise in the future.
WE ARE SUBJECT TO LOSS AND OTHER CONTINGENCIES RELATING TO ALLEGATIONS OF
WRONGDOING AND ANTICOMPETITIVE ACTS MADE AGAINST MI, JRM, US AND OTHERS
INVOLVING WORLDWIDE HEAVY-LIFT ACTIVITIES IN THE MARINE CONSTRUCTION SERVICES
INDUSTRY.
In March 1997, we began an investigation into allegations of wrongdoing
by a limited number of our former employees and former employees of JRM and
others. The allegations concerned the heavy-lift business of one of JRM's joint
ventures, which owned and operated a fleet of large derrick vessels with lifting
capacities ranging from 3,500 to 13,200 tons, and JRM. On becoming aware of
these allegations, we notified authorities, including the Antitrust Division of
the U.S. Department of Justice ("DOJ"), the Securities and Exchange Commission
("SEC") and the European Commission. As a result of that prompt notification,
the DOJ has granted immunity to McDermott, JRM and certain affiliates, and our
officers, directors and employees at the time of disclosure, from criminal
prosecution for any anticompetitive acts involving worldwide heavy-lift
activities. This immunity was later expanded to include other areas of potential
exposure. We have cooperated and are continuing to cooperate with the DOJ in its
ongoing investigation into this and related matters. We also cooperated with an
SEC investigation into whether we and JRM may have violated U.S. securities laws
in connection with, but not limited to, this matter. In February 2001, we were
advised that the SEC has terminated its investigation and no enforcement action
has been recommended.
In June 1998, a number of major and independent oil and gas exploration
and development companies filed lawsuits in the United States District Court for
the Southern District of Texas against, among others, MI, JRM and us. These
lawsuits allege, among other things, that the defendants engaged in
anticompetitive acts in violation of Sections 1 and 2 of the Sherman Act,
engaged in fraudulent activity and tortiously interfered with the plaintiffs'
businesses in connection with certain offshore transportation and installation
projects. In addition to seeking injunctive relief, actual damages and
attorneys' fees, the plaintiffs are requesting treble damages.
We cannot predict the ultimate outcome of the DOJ investigation, the
civil lawsuits or any actions that others may take in connection with the
allegations we describe above. These matters could result in civil liability and
have a material adverse effect on our consolidated financial position and
results of operations.
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OUR MARINE CONSTRUCTION SERVICES SEGMENT DERIVES SUBSTANTIALLY ALL ITS REVENUES
FROM COMPANIES IN THE OIL AND GAS EXPLORATION AND PRODUCTION INDUSTRY, A
HISTORICALLY CYCLICAL INDUSTRY WITH LEVELS OF ACTIVITY THAT ARE SIGNIFICANTLY
AFFECTED BY THE LEVELS AND VOLATILITY OF OIL AND GAS PRICES.
The demand for marine construction services has traditionally been
cyclical, depending primarily on the capital expenditures of oil and gas
companies for developmental construction. These capital expenditures are
influenced by such factors as:
o prevailing oil and gas prices;
o expectations about future prices;
o the cost of exploring for, producing and delivering oil and
gas;
o expectations about future prices, the cost of exploring for,
producing and delivering oil and gas;
o the sale and expiration dates of available offshore leases;
o the discovery rate of new oil and gas reserves in offshore
areas;
o domestic and international political, military, regulatory and
economic conditions;
o technological advances; and
o the ability of oil and gas companies to generate funds for
capital expenditures.
Prices for oil and gas historically have been extremely volatile and
have reacted to changes in the supply of and demand for oil and natural gas
(including changes resulting from the ability of the Organization of Petroleum
Exporting Countries to establish and maintain production quotas), domestic and
worldwide economic conditions and political instability in oil producing
countries. We can provide no assurance that particular levels of oil and gas
activities and capital expenditures on offshore development operations will be
achieved or maintained or that demand for our marine construction services will
reflect the level of those activities. We anticipate prices for oil and natural
gas will continue to be volatile and affect the demand for and pricing of our
services. A material decline in oil or natural gas prices or activities over a
sustained period of time could materially adversely affect the demand for our
services and, therefore, our results of operations and financial condition.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH CONTRACTUAL PRICING IN THE OFFSHORE
MARINE CONSTRUCTION INDUSTRY.
Because of the highly competitive nature of the offshore marine
construction industry, our Marine Construction Services segment performs a
substantial number of its projects on a fixed-price basis. We attempt to cover
increased costs of anticipated charges in labor, material and service costs of
long-term contracts, either through estimates of cost increases, which are
reflected in the original contract price, or through price escalation clauses.
Despite these attempts, however, the revenue, cost and gross profit we realize
on a fixed-price contract will often vary from the estimated amounts because of
changes in job conditions and variations in labor and equipment productivity
over the term of the contract. These variations and the risks generally inherent
in the marine construction industry may result in the gross profits we realize
being different from those we originally estimated and may result in reduced
profitability or losses on projects.
In addition, we recognize revenues under our long-term contracts in the
Marine Construction Services segment on a percentage-of-completion basis.
Accordingly, we review contract price and cost estimates periodically as the
work progresses and reflect adjustments proportionate to the percentage of
completion in income in the period when we revise those estimates. To the extent
these adjustments result in a reduction or an elimination of previously reported
profits with respect to a project, we would recognize a charge against current
earnings, which could be material.
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WE FACE RISKS ASSOCIATED WITH OPERATING FOREIGN SUBSIDIARIES AND JOINT VENTURES.
We conduct some operations through foreign subsidiaries and joint
ventures. Some of these entities are not managed by us. Even in those joint
ventures that we manage, we are often required to consider the interests of our
joint venture partners in connection with decisions concerning the operations of
the joint ventures. Arrangements involving these subsidiaries and joint ventures
may restrict us from gaining access to the cash flows or assets of these
entities. In addition, these foreign subsidiaries and joint ventures sometimes
face governmentally imposed restrictions on their abilities to transfer funds to
us.
WE FACE RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS.
We derive a significant portion of our revenues from international
operations. Our international operations are subject to political, economic and
other uncertainties not encountered in domestic operations. These include:
o risks of war and civil unrest;
o expropriation or nationalization of our assets;
o renegotiation or nullification of our existing contracts;
o changing political conditions and changing laws and policies
affecting trade and investment;
o the overlap of different tax structures; and
o the risks associated with the assertion of foreign sovereignty
over areas in which our operations are conducted.
Our Marine Construction Services segment may be particularly
susceptible to regional conditions that may adversely affect its operations,
because its major marine vessels typically require relatively long periods of
time to mobilize over long distances. Additionally, various foreign
jurisdictions have laws limiting the right and ability of foreign subsidiaries
and joint ventures to pay dividends and remit earnings to affiliated companies.
Our international operations sometimes face the additional risks of
fluctuating currency values, hard currency shortages and controls of foreign
currency exchange. We attempt to minimize our exposure to foreign currency
fluctuations by attempting to match anticipated foreign currency contract
receipts with anticipated like foreign currency disbursements. To the extent we
are unable to match the anticipated foreign currency receipts and disbursements
related to our contracts, we attempt to enter into forward contracts to hedge
foreign currency transactions on a continuing basis for periods consistent with
our committed exposures.
OUR OPERATIONS ARE SUBJECT TO OPERATING RISKS AND LIMITS ON INSURANCE COVERAGE,
WHICH COULD EXPOSE US TO POTENTIALLY SIGNIFICANT LIABILITY COSTS.
We are subject to a number of risks inherent in our operations,
including:
o accidents resulting in the loss of life or property;
o pollution or other environmental mishaps;
o adverse weather conditions;
o mechanical failures;
o collisions;
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o property losses;
o business interruption due to political action in foreign
countries; and
o labor stoppages.
We have been, and in the future we may be, named as defendants in
lawsuits asserting large claims as a result of litigation arising from events
such as these. We maintain insurance for such amounts and against such risks
that we deem adequate. However, certain risks are either not insurable or
insurance is available only at rates that we consider uneconomical. Among those
risks are war and confiscation of property in certain areas of the world and
pollution liability in excess of relatively low limits. Depending on competitive
conditions and other factors, we endeavor to obtain contractual protection
against uninsured risks from our customers. When obtained, such contractual
indemnification protection may not in all cases be supported by adequate
insurance maintained by the customer. Such insurance or contractual indemnity
protection may not be sufficient or effective under all circumstances or against
all hazards to which we may be subject. A successful claim for which we are not
fully insured could have a material adverse effect on us.
BWXT, through two of its dedicated limited liability companies, has
long-term management and operating agreements with the U.S. Government for the
Y-12 and the Pantex facilities. Most insurable liabilities arising from these
sites are not protected in our corporate insurance program but rely on
government contractual agreements and certain specialized self-insurance
programs funded by the U.S. Government. The U.S. Government has historically
fulfilled its contractual agreement to reimburse for insurable claims and we
expect them to continue this process during our administrations of these two
facilities. However, in most situations, the U. S. Government is not
contractually obligated to pay under a formal indemnification agreement.
WE DEPEND ON SIGNIFICANT CUSTOMERS.
Some of our industry segments derive a significant amount of their
revenues from a small number of customers. The inability of these segments to
continue to perform services for a number of their large existing customers, if
not offset by contracts with new or other existing customers, could have a
material adverse effect on our business and operations.
Our significant customers include state and federal government agencies
and utilities. In particular, our Government Operations segment derives
substantially all its revenue from the U.S. Government. Some of our large
multi-year contracts with the U.S. Government are subject to annual funding
determinations. State and U.S. Government budget restraints and other factors
affecting these governments may adversely affect our business.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST CURRENT AND FUTURE
COMPETITORS.
Most industry segments in which we operate are highly competitive. Some
of our competitors or potential competitors have greater financial or other
resources than we have. Our operations may be adversely affected if our current
competitors or new market entrants introduce new products or services with
better features, performance, prices or other characteristics than those of our
products and services.
THE LOSS OF THE SERVICES OF ONE OR MORE OF OUR KEY PERSONNEL, OR OUR FAILURE TO
ATTRACT, ASSIMILATE AND RETAIN TRAINED PERSONNEL IN THE FUTURE, COULD DISRUPT
OUR OPERATIONS AND RESULT IN LOSS OF REVENUES.
Our success depends on the continued active participation of our
executive officers and key operating personnel. The loss of the services of any
one of these persons could adversely affect our operations.
Our operations require the services of employees having the technical
training and experience necessary to obtain the proper operational results. As a
result, our operations depend, to a considerable extent, on the continuing
availability of such personnel. If we should suffer any material loss of
personnel to competitors or be unable to employ additional or replacement
personnel with the requisite level of training and experience to adequately
operate our equipment, our operations could be adversely affected. While we
believe our wage rates are competitive and
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our relationships with our employees are satisfactory, a significant increase in
the wages paid by other employers could result in a reduction in our workforce,
increases in wage rates, or both. If either of these events occurred for a
significant period of time, our financial condition and results of operations
could be adversely impacted.
A substantial number of our employees are members of labor unions.
Although we expect to renew our union contracts without incident, if we are
unable to negotiate acceptable new contracts with our unions in the future, we
could experience strikes or other work stoppages by the affected employees, and
new contracts could result in increased operating costs attributable to both
union and non-union employees. If any such strikes or other work stoppages were
to occur, or if our other employees were to become represented by unions, we
could experience a significant disruption of our operations and higher ongoing
labor costs.
WE ARE SUBJECT TO GOVERNMENT REGULATIONS THAT MAY ADVERSELY AFFECT OUR FUTURE
OPERATIONS.
Many aspects of our operations and properties are affected by political
developments and are subject to both domestic and foreign governmental
regulations, including those relating to:
o construction and equipping of production platforms and other
marine facilities;
o marine vessel safety;
o currency conversions and repatriation;
o oil exploration and development;
o taxation of foreign earnings and earnings of expatriate
personnel; and
o use of local employees and suppliers by foreign contractors.
In addition, our Marine Construction Services segment depends on the
demand for its services from the oil and gas industry and, therefore, is
affected by changing taxes, price controls and other laws and regulations
relating to the oil and gas industry generally. The adoption of laws and
regulations curtailing exploration and development drilling for oil and gas for
economic and other policy reasons would adversely affect the operations of our
Marine Construction Services segment by limiting the demand for its services. We
cannot determine to what extent our future operations and earnings may be
affected by new legislation, new regulations or changes in existing regulations.
ENVIRONMENTAL LAWS AND REGULATIONS AND CIVIL LIABILITY FOR CONTAMINATION OF THE
ENVIRONMENT OR RELATED PERSONAL INJURIES MAY RESULT IN INCREASES IN OUR
OPERATING COSTS AND CAPITAL EXPENDITURES AND DECREASES IN OUR EARNINGS AND CASH
FLOW.
Governmental requirements relating to the protection of the
environment, including solid waste management, air quality, water quality, the
decontamination and decommissioning of former nuclear manufacturing and
processing facilities and cleanup of contaminated sites, have had a substantial
impact on our operations. These requirements are complex and subject to frequent
change. In some cases, they can impose liability for the entire cost of cleanup
on any responsible party without regard to negligence or fault and impose
liability on us for the conduct of others or conditions others have caused, or
for our acts that complied with all applicable requirements when we performed
them. Our compliance with amended, new or more stringent requirements, stricter
interpretations of existing requirements or the future discovery of
contamination may require us to make material expenditures or subject us to
liabilities that we currently do not anticipate. In addition, some of our
operations and the operations of predecessor owners of some of our properties
have exposed us to civil claims by third parties for liability resulting from
contamination of the environment or personal injuries caused by releases of
hazardous substances into the environment.
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WE MAY ISSUE PREFERRED STOCK WHOSE TERMS COULD ADVERSELY AFFECT THE VOTING POWER
OR VALUE OF OUR COMMON STOCK.
Our articles of incorporation authorize us to issue, without the
approval of our shareholders, one or more classes or series of preferred stock
having such preferences, powers and relative, participating, optional and other
rights, including preferences over our common stock respecting dividends and
distributions, as our board of directors may determine. The terms of one or more
classes or series of preferred stock could adversely impact the voting power or
value of our common stock. For example, we might grant holders of preferred
stock the right to elect some number of our directors in all events or on the
happening of specified events or the right to veto specified transactions.
Similarly, the repurchase or redemption rights or liquidation preferences we
might assign to holders of preferred stock could affect the residual value of
the common stock. See "Description of Capital Stock -- Preferred Stock."
PROVISIONS IN OUR CORPORATE DOCUMENTS COULD DELAY OR PREVENT A CHANGE IN CONTROL
OF OUR COMPANY, EVEN IF THAT CHANGE WOULD BE BENEFICIAL TO OUR SHAREHOLDERS.
The existence of some provisions in our corporate documents could delay
or prevent a change in control of our company, even if that change would be
beneficial to our shareholders. Our articles of incorporation and amended and
restated by-laws contain provisions that may make acquiring control of our
company difficult, including:
o provisions relating to the classification, nomination and
removal of our directors;
o provisions regulating the ability of our shareholders to bring
matters for action at annual meetings of our shareholders; and
o the authorization given to our board of directors to issue and
set the terms of preferred stock.
WE ARE SUBJECT TO OTHER RISKS, INCLUDING THOSE THAT WE HAVE DISCUSSED IN OUR
ANNUAL REPORT ON FORM 10-K.
In addition to the risks we describe or refer to above, we are subject
to other risks, contingencies and uncertainties, including those we have
referred to under the heading "Cautionary Statement Concerning Forward-Looking
Statements" above and those we have discussed in our annual report on Form 10-K
for the year ended December 31, 2000 and subsequent filings we have made with
the SEC and incorporated by a reference into this prospectus.
FORWARD-LOOKING INFORMATION
This prospectus, including the information we incorporate by reference,
includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
You can identify our forward-looking statements by words such as "estimate,"
"project," "predict," "believe," "expect," "anticipate," "plan," "forecast,"
"budget," "goal" or other words that convey the uncertainty of future events or
outcomes. When considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements contained in this
prospectus, any prospectus supplement and the documents we have incorporated by
reference.
The forward-looking statements are not guarantees of future
performance, and we caution you not to rely unduly on them. We have based many
of these forward-looking statements on expectations and assumptions about future
events that may prove to be inaccurate. While our management considers these
expectations and assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other risks,
contingencies and uncertainties, most of which are difficult to predict and many
of which are beyond our control. These risks, contingencies and uncertainties
relate to, among other matters, the following:
o general economic and business conditions and industry trends;
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o the continued strength of the industries in which we are
involved;
o decisions about offshore developments to be made by oil and
gas companies;
o the deregulation of the U.S. electric power market;
o the highly competitive nature of our businesses;
o our future financial performance, including availability,
terms and deployment of capital;
o the continued availability of qualified personnel;
o operating risks normally incident to offshore exploration,
development and production operations;
o changes in, or our ability to comply with, government
regulations, and adverse outcomes from legal and regulatory
proceedings, including the results of ongoing governmental
investigations and related civil lawsuits involving alleged
anticompetitive practices in our marine construction business;
o estimates for pending and future nonemployee asbestos claims
against B&W and potential adverse developments that may occur
in the Chapter 11 reorganization proceedings involving B&W and
certain of its subsidiaries;
o the potential impact on available insurance due to the recent
increases in bankruptcy filings by asbestos-troubled
companies;
o changes in existing environmental regulatory matters;
o rapid technological changes;
o difficulties we may encounter in obtaining regulatory or other
necessary approvals of any strategic transactions;
o social, political and economic situations in foreign countries
where we do business;
o effects of asserted and unasserted claims;
o our ability to obtain surety bonds and letters of credit; and
o the continued ability of our insurers to reimburse us for
payments made to asbestos claimants.
We have discussed some of these factors in more detail in the "Risk Factors"
section of this prospectus. These factors are not necessarily all the important
factors that could affect us. We advise you that you should (1) be aware that
important factors we do not refer to above could affect the accuracy of our
forward-looking statements and (2) use caution and common sense when considering
our forward-looking statements. We do not intend to update these statements
unless the securities laws require us to do so.
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USE OF PROCEEDS
Unless we inform you otherwise in the prospectus supplement, we will
use the net proceeds from the sale of the offered securities for general
corporate purposes. These purposes may include acquisitions, working capital,
capital expenditures, repayment and refinancing of indebtedness and repurchases
and redemptions of securities. Pending any specific application, we may
initially invest those funds in short-term marketable securities or apply them
to the reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the periods shown is
as follows:
Six Months Nine-Month
Ended Year Ended Period Ended
June 30, December 31, December 31, Year Ended March 31,
2001 2000 1999 1999 1998 1997
---------- ------------ ------------ ---- ---- ----
Ratio of earnings to
fixed charges..................... 1.30x 1.10x 1.89x 3.00x 3.41x -
We have computed the ratios of earnings to fixed charges by dividing
earnings by fixed charges. For this purpose, "earnings" consist of income before
income taxes plus fixed charges exclusive of capitalized interest. "Fixed
charges" consist of interest, whether expensed or capitalized, amortization of
capitalized expenses relating to indebtedness and an estimate of the portion of
annual rental expense on operating leases that represents the interest factor.
As a result of a loss we incurred in the fiscal year ended March 31, 1997, our
earnings did not cover our fixed charges by approximately $214.8 million in that
fiscal year.
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DESCRIPTION OF DEBT SECURITIES
The debt securities covered by this prospectus will be our general
unsecured obligations. The debt securities will be either senior debt securities
or subordinated debt securities. We will issue the debt securities under one or
more separate indentures between us and a trustee that we will name in the
prospectus supplement. Senior debt securities will be issued under a senior
indenture, and subordinated debt securities will be issued under a subordinated
indenture. In this description, we sometimes call the senior indenture and the
subordinated indenture the "indentures."
We have summarized selected provisions of the indentures and the debt
securities below. You should read the indentures for more details regarding the
provisions we describe below and for other provisions that may be important to
you. We have filed the forms of the indentures with the SEC as exhibits to the
registration statement, and we will include the applicable final indenture and
any other instrument establishing the terms of any debt securities we offer as
exhibits to a filing we will make with the SEC in connection with that offering.
Please read "Where You Can Find More Information."
In this summary description of the debt securities, all references to
"McDermott" or "us" mean McDermott International, Inc. only, unless we state
otherwise or the context clearly indicates otherwise.
GENERAL
The senior debt securities will constitute senior debt and will rank
equally with all our unsecured and unsubordinated debt. The subordinated debt
securities will be subordinated to, and thus have a junior position to, any
senior debt securities and all our other senior debt. The indentures will not
limit the amount of debt we may issue under the indentures, and, unless we
inform you otherwise in the prospectus supplement, they will not limit the
amount of other unsecured debt or securities we may incur or issue. We may issue
debt securities under either indenture from time to time in one or more series,
each in an amount we authorize prior to issuance.
We conduct a substantial part of our operations through our
subsidiaries, and our subsidiaries generate a significant part of our operating
income and cash flow. As a result, distributions or advances from our
subsidiaries are important sources of funds to meet our debt service
obligations. Contractual provisions or laws, as well as our subsidiaries'
financial condition and operating requirements, may limit our ability to obtain
from our subsidiaries cash that we need to pay our debt service obligations,
including payments on the debt securities. In addition, holders of the debt
securities will have a junior position to the claims of creditors of our
subsidiaries on their assets and earnings.
Unless we inform you otherwise in the prospectus supplement, the
indentures and the debt securities will not contain:
o any covenants or other provisions designed to protect holders
of the debt securities in the event we participate in a highly
leveraged transaction; or
o provisions that give holders of the debt securities the right
to require us to repurchase their securities in the event of a
decline in our credit rating resulting from a takeover,
recapitalization or similar restructuring or otherwise.
The prospectus supplement relating to any series of debt securities
being offered will include specific terms relating to the offering. These terms
will include some or all of the following:
o the title of the debt securities;
o the total principal amount of the debt securities;
o whether the debt securities are senior debt securities or
subordinated debt securities;
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o whether we will issue the debt securities in individual
certificates to each holder or in the form of temporary or
permanent global securities held by a depositary on behalf of
holders;
o the date or dates on which the principal of and any premium on
the debt securities will be payable;
o any interest rate, the date from which interest will accrue,
interest payment dates and record dates for interest payments;
o whether and under what circumstances any additional amounts
with respect to the debt securities will be payable;
o the place or places where payments on the debt securities will
be payable;
o any provisions for redemption or early repayment;
o any sinking fund or other provisions that would obligate us to
redeem, purchase or repay the debt securities prior to
maturity;
o the denominations in which we may issue the debt securities;
o whether payments on the debt securities will be payable in
foreign currency or currency units or another form, and
whether payments will be payable by reference to any index or
formula;
o the portion of the principal amount of the debt securities
that will be payable if the maturity is accelerated, if other
than the entire principal amount;
o any additional means of defeasance of the debt securities, any
additional conditions or limitations to defeasance of the debt
securities or any changes to those conditions or limitations;
o any changes or additions to the events of default or covenants
this prospectus describes;
o any restrictions or other provisions relating to the transfer
or exchange of the debt securities;
o any terms for the conversion or exchange of the debt
securities for other securities issued by McDermott or any
other entity; and
o any other terms of the debt securities.
We may sell the debt securities at a discount, which may be
substantial, below their stated principal amount. Those debt securities may bear
no interest or may bear interest at a rate that at the time of issuance is below
market rates.
If we sell any of the debt securities for any foreign currency or
currency unit or if payments on the debt securities are payable in any foreign
currency or currency unit, we will describe in the prospectus supplement the
restrictions, elections, tax consequences, specific terms and other information
relating to those debt securities and the foreign currency or currency unit.
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest
and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
Senior Debt. Unless we inform you otherwise in the prospectus supplement, we may
not make any payment of principal, interest or any premium on the subordinated
debt securities if:
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o we fail to pay the principal, interest, premium or any other
amounts on any Senior Debt when due; or
o we default in performing any other covenant (a "covenant
default") in any Senior Debt that we have designated if the
covenant default allows the holders of that Senior Debt to
accelerate the maturity of the Senior Debt they hold.
Unless we inform you otherwise in the prospectus supplement, a covenant
default will prevent us from making payments on the subordinated debt securities
only for up to 179 days after holders of the Senior Debt give the trustee for
the subordinated debt securities notice of the covenant default.
The subordination provisions will not affect our obligation, which will
be absolute and unconditional, to pay, when due, principal of, premium, if any,
and interest on the subordinated debt securities. In addition, the subordination
provisions will not prevent the occurrence of any default under the subordinated
indenture.
Unless we inform you otherwise in the prospectus supplement, the
subordinated indenture will not limit the amount of Senior Debt that we may
incur. As a result of the subordination of the subordinated debt securities, if
we became insolvent, holders of subordinated debt securities may receive less on
a proportionate basis than our other creditors.
Unless we inform you otherwise in the prospectus supplement, "Senior
Debt" will mean all notes or other indebtedness, including guarantees, of
McDermott for money borrowed and similar obligations, unless the indebtedness
states that it is not senior to the subordinated debt securities or our other
junior debt.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indentures generally will permit a consolidation or merger between
us and another entity. They also will permit the sale by us of our assets
substantially as an entirety. The indentures will provide, however, that we may
consolidate with another entity to form a new entity or merge into any other
entity or transfer or dispose of our assets substantially as an entirety to any
other entity only if:
o the resulting or surviving entity assumes the due and punctual
payments on the debt securities and the performance of our
covenants and obligations under the applicable indenture and
the debt securities; and
o immediately after giving effect to the transaction, no default
or event of default would occur and be continuing.
EVENTS OF DEFAULT
Unless we inform you otherwise in the prospectus supplement, the
following will be events of default with respect to a series of debt securities:
o our failure to pay interest or any required additional amounts
on any debt securities of that series for 30 days;
o our failure to pay principal of or any premium on any debt
securities of that series when due;
o our failure to deposit any mandatory sinking fund payment for
that series of debt securities when due for 30 days;
o our failure to comply with any of our covenants or agreements
in the debt securities of that series or the applicable
indenture, other than an agreement or covenant that we have
included in that indenture solely for the benefit of other
series of debt securities, for 90 days after written notice by
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the trustee or by the holders of at least 25% in principal
amount of all the outstanding debt securities issued under
that indenture that are affected by that failure;
o specified events involving bankruptcy, insolvency or
reorganization of McDermott; and
o any other event of default provided for that series of debt
securities.
A default under one series of debt securities will not necessarily be a
default under another series. The trustee may withhold notice to the holders of
the debt securities of any default or event of default, except in any payment on
the debt securities, if the trustee in good faith determines that withholding
notice is in the interest of the holders of the debt securities.
If an event of default for any series of debt securities occurs and is
continuing, the trustee or the holders of at least 25% in principal amount of
the outstanding debt securities of the series affected by the default, or, in
some cases, 25% in principal amount of all senior debt securities or
subordinated debt securities affected, voting as one class, may declare the
principal of and all accrued and all unpaid interest on those debt securities to
be immediately due and payable. If an event of default relating to events of
bankruptcy, insolvency or reorganization occurs, the principal of and all
accrued and unpaid interest on all the debt securities will become immediately
due and payable without any action on the part of the applicable trustee or any
holder. The holders of a majority in principal amount of the outstanding debt
securities of the series affected by the default, or of all senior debt
securities or subordinated debt securities affected, voting as one class, may in
some cases rescind this accelerated payment requirement. Depending on the terms
of our other indebtedness, an event of default under either of the indentures
may give rise to cross defaults on our other indebtedness.
A holder of a debt security of any series will be able to pursue any
remedy under the applicable indenture only if:
o the holder gives the trustee written notice of a continuing
event of default for that series;
o the holders of at least 25% in principal amount of the
outstanding debt securities of that series make a written
request to the trustee to pursue the remedy;
o the holder or holders offer to the trustee indemnity
reasonably satisfactory to it;
o the trustee fails to act for a period of 60 days after receipt
of notice and offer of indemnity; and
o during that 60-day period, the holders of a majority in
principal amount of the debt securities of that series do not
give the trustee a direction inconsistent with the request.
This provision will not, however, affect the right of a holder of a debt
security to sue for enforcement of any overdue payment.
In most cases, holders of a majority in principal amount of the
outstanding debt securities of a series, or of all debt securities affected,
voting as one class, will be able to direct the time, method and place of:
o conducting any proceeding for any remedy available to the
applicable trustee; and
o exercising any trust or power conferred on the applicable
trustee not relating to or arising under an event of default.
Each indenture will require us to file with the trustee each year a
written statement as to our compliance with the covenants contained in that
indenture.
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MODIFICATION AND WAIVER
We may amend or supplement either indenture if the holders of a
majority in principal amount of the outstanding debt securities of all series
issued under the applicable indenture and affected by the amendment or
supplement, acting as one class, consent to it. Without the consent of the
holder of each debt security affected, however, no amendment or supplement may:
o reduce the amount of debt securities whose holders must
consent to an amendment, supplement or waiver;
o reduce the rate of or change the time for payment of interest
on any debt security;
o reduce the principal of, premium on or any mandatory sinking
fund payment for any debt security;
o change the stated maturity of any debt security;
o reduce any premium payable on the redemption of any debt
security or change the time at which any debt security may or
must be redeemed;
o change any obligation to pay additional amounts on any debt
security;
o make the payments on any debt security payable in any currency
or currency unit other than as the debt security originally
states;
o impair the holder's right to institute suit for the
enforcement of any payment on any debt security;
o make any change in the percentage of principal amount of debt
securities necessary to waive compliance with specified
provisions of the applicable indenture or to make any change
in the applicable indenture's provisions for modification;
o waive a continuing default or event of default regarding any
payment on any debt security; or
o with respect to the subordinated indenture, modify the
provisions relating to the subordination of any subordinated
debt security in a manner adverse to the holder of that
security.
We and the applicable trustee may agree to amend or supplement either
indenture or waive any provision of either indenture without the consent of any
holders of debt securities in some circumstances, including:
o to cure any ambiguity, omission, defect or inconsistency;
o to provide for the assumption of our obligations under the
indenture by a successor upon any merger, consolidation or
asset transfer;
o to provide for uncertificated debt securities in addition to
or in place of certificated debt securities or to provide for
bearer debt securities;
o to provide any security for or add guarantees of any series of
debt securities;
o to comply with any requirement to effect or maintain the
qualification of the indenture under the Trust Indenture Act
of 1939;
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o to add covenants that would benefit the holders of any debt
securities or to surrender any rights we have under the
indenture;
o to add events of default with respect to any debt securities;
o to make any change that does not adversely affect any
outstanding debt securities of any series in any material
respect;
o to facilitate the defeasance or discharge of any series of
debt securities if that change does not adversely affect the
holders of debt securities of that series or any other series
under the indenture in any material respect; and
o to provide for the acceptance of a successor or another
trustee.
The holders of a majority in principal amount of the outstanding debt
securities of any series, or of all senior debt securities or subordinated debt
securities affected, voting as one class, may waive any existing or past default
or event of default with respect to those debt securities. Those holders may
not, however, waive any default or event of default in any payment on any debt
security or compliance with a provision that cannot be amended or supplemented
without the consent of each holder affected.
DISCHARGE AND DEFEASANCE
We will be discharged from all obligations under the applicable
indenture with respect to any series of debt securities, except for surviving
obligations relating to any conversion rights and to register the transfer or
exchange of the debt securities, if:
o all debt securities of the series previously authenticated and
delivered under the relevant indenture have been delivered to
the indenture trustee for cancellation; or
o all debt securities of that series have become due and payable
or will become due and payable within one year, at maturity or
by redemption, and we deposit with the applicable trustee
funds or government securities sufficient to make payments on
the debt securities of that series on the dates those payments
are due.
To exercise our right to be discharged, we must deliver to the
applicable trustee an opinion of counsel and an officers' certificate stating
that all conditions precedent to the satisfaction and discharge of the
applicable indenture have been complied with.
In addition to our right of discharge described above, we may deposit
with the applicable trustee funds or government securities sufficient to make
payments on the debt securities of a series on the dates those payments are due
and payable, then, at our option, either of the following will occur:
o we will be discharged from our obligations with respect to the
debt securities of that series ("legal defeasance"); or
o we will no longer have any obligation to comply with the
restrictive covenants under the applicable indenture, and the
related events of default will no longer apply to us, but some
of our other obligations under the indenture and the debt
securities of that series, including our obligation to make
payments on those debt securities, will survive ("covenant
defeasance").
If we defease a series of debt securities, the holders of the debt
securities of the series affected will not be entitled to the benefits of the
applicable indenture, except for our obligations to:
o register the transfer or exchange of debt securities;
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o replace stolen, lost or mutilated debt securities; and
o maintain paying agencies and hold moneys for payment in trust.
Unless we inform you otherwise in the prospectus supplement, we will be
required to deliver to the applicable trustee an opinion of counsel that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for United States federal income
tax purposes. If we elect legal defeasance, that opinion of counsel must be
based on a ruling from the United States Internal Revenue Service or a change in
law to that effect.
GOVERNING LAW
New York law will govern the indentures and the debt securities.
TRUSTEE
If an event of default occurs and is continuing, the trustee will be
required to use the degree of care and skill of a prudent person in the conduct
of his own affairs. The trustee will become obligated to exercise any of its
powers under the indenture at the request of any of the holders of any debt
securities only after those holders have offered the trustee indemnity
reasonably satisfactory to it.
Each indenture will limit the right of the trustee, if it becomes one
of our creditors, to obtain payment of claims or to realize on certain property
received for any such claim, as security or otherwise. The trustee may engage in
other transactions with us. If it acquires any conflicting interest, however, it
must eliminate that conflict or resign.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
We will issue the debt securities in registered form, without interest
coupons. We will not charge a service charge for any registration of transfer or
exchange of the debt securities. We may, however, require the payment of any tax
or other governmental charge payable for that registration.
Debt securities of any series will be exchangeable for other debt
securities of the same series with the same total principal amount and the same
terms but in different authorized denominations in accordance with the
applicable indenture. Holders may present debt securities for registration of
transfer at the office of the security registrar or any transfer agent we
designate. The security registrar or transfer agent will effect the transfer or
exchange when it is satisfied with the documents of title and identity of the
person making the request.
Unless we inform you otherwise in the prospectus supplement, we will
appoint the trustee under each indenture as security registrar for the debt
securities we issue under that indenture. If the prospectus supplement refers to
any transfer agents initially designated by us, we may at any time rescind that
designation or approve a change in the location through which any transfer agent
acts. We will be required to maintain an office or agency for transfers and
exchanges in each place of payment. We may at any time designate additional
transfer agents for any series of debt securities or rescind the designation of
any transfer agent.
In the case of any redemption, neither the security registrar nor the
transfer agent will be required to register the transfer or exchange of any debt
security:
o during a period beginning 15 business days before the day of
mailing of the relevant notice of redemption and ending on the
close of business on that day of mailing; or
o if we have called the debt security for redemption in whole or
in part, except the unredeemed portion of any debt security
being redeemed in part.
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PAYMENT AND PAYING AGENTS
Unless we inform you otherwise in the prospectus supplement, we will
make payments on the debt securities in U.S. dollars at the office of the
applicable trustee or any paying agent we designate. At our option, we may make
payments by check mailed to the holder's registered address or, with respect to
global debt securities, by wire transfer. Unless we inform you otherwise in the
prospectus supplement, we will make interest payments to the person in whose
name the debt security is registered at the close of business on the record date
for the interest payment.
Unless we inform you otherwise in the prospectus supplement, we will
designate the trustee under each indenture as our paying agent for payments on
debt securities we issue under that indenture. We may at any time designate
additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts.
Subject to the requirements of any applicable abandoned property laws,
the trustee and paying agent will repay to us upon written request any funds
held by them for payments on the debt securities that remain unclaimed for two
years after the date upon which that payment has become due. After repayment to
us, holders entitled to those funds must look only to us for payment.
BOOK-ENTRY DEBT SECURITIES
We may issue the debt securities of a series in the form of one or more
global debt securities that would be deposited with a depositary or its nominee
identified in the prospectus supplement. We may issue global debt securities in
either temporary or permanent form. We will describe in the prospectus
supplement the terms of any depositary arrangement and the rights and
limitations of owners of beneficial interests in any global debt security.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of:
o 150,000,000 shares of common stock; and
o 25,000,000 shares of preferred stock, issuable in series.
As of August 31, 2001, there were 61,455,311 shares of common stock
issued and outstanding, net of 2,065,612 shares held as treasury stock. Also as
of August 31, 2001, there were 110,000 shares of our preferred stock issued
and outstanding, all of which were owned by MI.
In the discussion that follows, we refer to (1) our articles of
incorporation, as amended, as our "articles of incorporation" and (2) our
amended and restated by-laws as our "by-laws." In this discussion, we have
summarized selected provisions of our articles of incorporation and by-laws
relating to our capital stock. You should read our articles of incorporation and
by-laws as currently in effect for more details regarding the provisions we
describe below and for other provisions that may be important to you. We have
filed copies of those documents with the SEC, and they are incorporated by
reference as exhibits to the registration statement.
Please read "Where You Can Find More Information."
COMMON STOCK
Holders of common stock are entitled to one vote per share on matters
submitted to them. Holders of common stock may not cumulate their votes in the
election of directors. As a result, the holders of a majority of the voting
power of the shares voting for the election of directors can elect all directors
to be elected if they choose to do so. Our board of directors may grant holders
of preferred stock, in the resolutions creating the series of preferred stock,
the right to vote on the election of directors or any questions affecting us.
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Some business combination transactions require more than a simple
majority vote. We have described these business combination transactions below
under "-- Other Matters -- Business Combination Transactions Requiring More Than
a Majority Vote."
Holders of common stock will be entitled to dividends in such amounts
and at such times as our board of directors in its discretion may declare out of
funds legally available for the payment of dividends. We generally do not pay
cash dividends, and we intend to retain future earnings to provide funds for use
in the operation and expansion of our business. In addition, the payment of
dividends on the common stock may be limited by obligations we may have to
holders of any preferred stock or by the provisions of our debt instruments.
If we liquidate or dissolve our business, the holders of common stock
will share ratably in all assets available for distribution to shareholders
after our creditors are paid in full and the holders of all series of our
outstanding preferred stock, if any, receive their liquidation preferences in
full.
The common stock has no preemptive rights and is not convertible or
redeemable or entitled to the benefits of any sinking or repurchase fund. All
issued and outstanding shares of common stock are fully paid and nonassessable.
Any shares of common stock we offer and sell under this prospectus will also be
fully paid and nonassessable.
Our outstanding shares of the common stock are listed on the New York
Stock Exchange and trade under the symbol "MDR." Any additional shares of common
stock we offer and sell under this prospectus will also be listed on the New
York Stock Exchange.
PREFERRED STOCK
At the direction of our board of directors, without any action by the
holders of common stock, we may issue one or more series of preferred stock from
time to time. Our board of directors can determine the number of shares of each
series of preferred stock and the voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions applicable to any of those rights,
including dividend rights, voting rights, conversion or exchange rights, terms
of redemption and liquidation preferences, of each series.
The prospectus supplement relating to any series of preferred stock we
offer will include specific terms relating to the offering. These terms will
include some or all of the following:
o the series designation of the preferred stock;
o the maximum number of shares of the series;
o the dividend rate or the method of calculating the dividend,
the date from which dividends will accrue and whether
dividends will be cumulative;
o any liquidation preference;
o any optional redemption provisions;
o any sinking fund or other provisions that would obligate us to
redeem or repurchase the preferred stock;
o any terms for the conversion or exchange of the preferred
stock for any other securities;
o any voting rights; and
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o any other preferences and relative, participating, optional or
other special rights or any qualifications, limitations or
restrictions on the rights of the shares.
Any preferred stock we offer and sell under this prospectus will be
fully paid and nonassessable.
The description of the terms of the preferred stock to be set forth in
an applicable prospectus supplement will not be complete and will be subject to
and qualified by the certificate of designation relating to the applicable
series of preferred stock. The registration statement will include the
certificate of designation as an exhibit or will incorporate the certificate of
designation by reference. You should read that document for provisions that may
be important to you.
Undesignated preferred stock may enable our board of directors to
render more difficult or to discourage an attempt to obtain control of us by
means of a tender offer, proxy contest, merger or otherwise, and to thereby
protect the continuity of our management. The issuance of shares of preferred
stock may adversely affect the rights of the holders of common stock. For
example, any preferred stock issued may rank prior to the common stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of common stock. As a result, the
issuance of shares of preferred stock may discourage bids for common stock or
may otherwise adversely affect the market price of the common stock or any
existing preferred stock.
LIMITATION ON DIRECTORS' LIABILITY
Our articles of incorporation limit the liability of our directors to
us or our shareholders such that no member of our board of directors will be
personally liable for monetary damages for any breach of the member's fiduciary
duty as a director, except for liability:
o for any breach of the member's duty of loyalty to us or our
shareholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o for unlawful payments of dividends or unlawful stock
repurchases or redemptions; and
o for any transaction from which the member derived an improper
personal benefit.
This provision could have the effect of discouraging or deterring our
shareholders from bringing a lawsuit against our directors for breach of their
duty of care, even though such an action, if successful, might otherwise have
benefited our shareholders and us. Our by-laws provide indemnification to our
officers and directors and other specified persons with respect to their conduct
in various capacities, and we have entered into agreements with each of our
directors which provide them with contractual rights of indemnification
consistent with our by-laws.
OTHER MATTERS
Some of the provisions of our articles of incorporation and by-laws
discussed below may have the effect, either alone or in combination, of making
more difficult or discouraging a tender offer, proxy contest or other takeover
attempt that our board of directors opposes but that a shareholder might
consider to be in its best interest.
Business Combination Transactions Requiring More Than a Majority Vote.
Under our articles of incorporation, whenever applicable law requires the vote
or consent of our shareholders to authorize or approve a sale, lease or exchange
of all or substantially all our property or assets or to adopt or approve an
agreement of merger or consolidation of our company with or into any other
corporation or to merge any other corporation into our company, the vote of at
least two-thirds of our outstanding capital stock entitled to vote on that
transaction is required for any such authorization, adoption or approval.
The super-majority requirements described above could cause the
following:
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o a delay, deferral or prevention of a change in control of our
company;
o entrench management; or
o make it more difficult to effect a business transaction even
if the transaction is favored by a majority of our
shareholders.
Classified Board of Directors; Filling Vacancies on our Board of
Directors. Our articles of incorporation provide for a classified board of
directors. Our articles of incorporation also provide that the number of
directors is to be fixed from time to time by vote of a majority of the board of
directors, but will not be reduced so as to shorten the term of any director who
is in office at the time of the reduction. As of August 31, 2001, our board of
directors consisted of nine persons. As a result of the current size of our
board, our board of directors is divided into three classes, with the directors
of each class as nearly equal in number as possible. The directors of each class
serve a term that expires at the third succeeding annual meeting of our
shareholders after their election. At each annual meeting of our shareholders,
the term of a different class of our directors expires. Our articles of
incorporation provide that, if the number of members of our board of directors
is reduced (1) below nine, there will be only two classes of directors, and (2)
below six, there will be only one class of directors. Our articles of
incorporation also provide that the classified board provisions may not be
amended without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock entitled to vote on that amendment.
Although members of our board of directors may be removed by a majority vote of
our shareholders entitled to vote in the election of directors, our articles of
incorporation provide that any vacancies will be filled only by the affirmative
vote of a majority of our remaining directors, even if less than a quorum.
Therefore, without an amendment to our articles of incorporation, our board of
directors could prevent any shareholder from removing directors or enlarging our
board of directors and filling the vacancies with that shareholder's own
nominees. The classification of our board of directors makes it more difficult
for shareholders to change the composition of our board of directors and could
prevent a party who acquires control of a majority of our outstanding voting
stock from obtaining control of our board of directors until the second annual
shareholders' meeting following the date that party obtains that control.
Shareholder Board Nominations and Other Proposals. Our by-laws
establish an advance-notice procedure for shareholders to make nominations of
candidates for election as directors or to bring other business before a meeting
of our shareholders. Our by-laws provide that, at any meeting of our
shareholders, only such business may be conducted as shall have been brought
before the meeting by or at the direction of our board of directors or by a
shareholder who has given timely written notice meeting the requirements we
describe below and who is a shareholder of record as of the time he gives that
notice and will be entitled to vote at the meeting.
Under these provisions, for notice of shareholder director nominations
or proposals to be made at an annual meeting to be timely, the notice must
generally be received by us:
o not less than 90 days nor more than 120 days prior to the
first anniversary of the previous year's annual meeting of
shareholders, or
o if the date of the annual meeting is advanced by more than 30
days prior to or delayed by more than 60 days after that
anniversary date, not earlier than the 120th day before the
meeting and not later than the close of business on the later
of (1) the 90th day before the meeting and (2) the tenth day
after we first make a public announcement of the date of the
meeting.
Under the by-laws, a shareholder's notice to us proposing to nominate
an individual for election as a director or relating to the conduct of business
other than the nomination of directors at a meeting must contain specified
information, including:
o the name and address of the shareholder and the beneficial
owner, if any, on whose behalf the nomination or proposal is
made;
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o a representation that the shareholder is entitled to vote at
that meeting and a statement of the number of shares of our
capital stock the shareholder owns and the number of shares of
our capital stock the beneficial owner, if any, beneficially
owns;
o a representation that the shareholder intends to appear in
person or by proxy at that meeting to nominate the person or
persons or to propose the business specified in the notice;
and
o either,
o as to each person the shareholder proposes
to nominate for election or re-election as a
director, the name and address of that
person and all other information regarding
that nominee which would be required in a
proxy statement filed under the SEC's rules
if our board of directors had nominated that
nominee, and a description of any
arrangements or understandings between the
shareholder and that nominee and any other
persons under which the nomination is to be
made, and the written consent of each such
nominee to being named in the proxy
statement as a nominee and to serve as a
director if elected, or
o as to each matter the shareholder proposes
to bring before the meeting, a brief
description of the business desired to be
brought before the meeting, the reasons for
conducting that business at the meeting and
any material interest of the shareholder in
that business.
The chairman of the meeting may refuse to permit any business to be
brought before a meeting by a shareholder if that business was not brought
before the meeting in compliance with the advance-notice provisions.
The advance-notice procedure may have the effect of precluding a
contest for the election of directors or the consideration of shareholder
proposals if the proper procedures are not followed, and of discouraging or
deterring a third party from conducting a solicitation of proxies to elect its
own slate of directors or to approve its own proposal, without regard to whether
consideration of those nominees or proposals might be harmful or beneficial to
our company and our shareholders.
Amendments to Articles of Incorporation and By-laws. An amendment to
our articles of incorporation generally requires the approval of the holders of
a majority of our outstanding capital stock entitled to vote on the amendment.
However, the affirmative vote of two-thirds of our outstanding capital stock
entitled to vote is required to amend, alter, change or repeal the provisions of
our articles of incorporation regarding:
o the votes required for business combinations described above,
and
o the number, election and classification of our directors.
Our board of directors may amend, alter or repeal our by-laws and adopt
new by-laws. In addition to requiring compliance with the advance-notice
provisions described above, our by-laws provide that the vote of the holders of
at least two-thirds of the voting power of the then outstanding shares of our
capital stock entitled to vote is required for shareholders to amend, alter or
repeal certain provisions of our by-laws relating to the powers and composition
of our board of directors.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is EquiServe
Trust Company, N.A.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, common stock,
preferred stock or other securities. We may issue warrants independently or
together with other securities. Warrants sold with other securities may be
attached to or separate from the other securities. If we issue warrants, we will
do so under one or more warrant agreements between us and a warrant agent that
we will name in the prospectus supplement.
We have summarized selected provisions of the warrants below. If we
offer any warrants, we will file the forms of warrant certificate and warrant
agreement with the SEC, and you should read those documents for provisions that
may be important to you.
The prospectus supplement relating to any warrants being offered will
include specific terms relating to the offering. These terms will include some
or all of the following:
o the title of the warrants;
o the aggregate number of warrants offered;
o the designation, number and terms of the debt securities,
common stock, preferred stock or other securities purchasable
on exercise of the warrants, and procedures that may result in
the adjustment of those numbers;
o the exercise price of the warrants;
o the dates or periods during which the warrants are
exercisable;
o the designation and terms of any securities with which the
warrants are issued;
o if the warrants are issued as a unit with another security,
the date on and after which the warrants and the other
security will be separately transferable;
o if the exercise price is not payable in U.S. dollars, the
foreign currency, currency unit or composite currency in which
the exercise price is denominated;
o any minimum or maximum amount of warrants that may be
exercised at any one time;
o any terms, procedures and limitations relating to the
transferability, exchange or exercise of the warrants; and
o any other terms of the warrants.
Warrant certificates will be exchangeable for new warrant certificates
of different denominations at the office indicated in the prospectus supplement.
Prior to the exercise of their warrants, holders of warrants will not have any
of the rights of holders of the securities subject to the warrants.
MODIFICATIONS
We may amend the warrant agreements and the warrants without the
consent of the holders of the warrants to cure any ambiguity, to cure, correct
or supplement any defective or inconsistent provision, or in any other manner
that will not materially and adversely affect the interests of holders of
outstanding warrants.
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We may also modify or amend various other terms of the warrant
agreements and the warrants with the consent of the holders of not less than a
majority in number of the then outstanding unexercised warrants affected.
Without the consent of the holders affected, however, no modification or
amendment may:
o shorten the period of time during which the warrants may be
exercised; or
o otherwise materially and adversely affect the exercise rights
of the holders of the warrants.
ENFORCEABILITY OF RIGHTS
The warrant agent will act solely as our agent. The warrant agent will
not have any duty or responsibility if we default under the warrant agreements
or the warrant certificates. A warrant holder may, without the consent of the
warrant agent, enforce by appropriate legal action on its own behalf the
holder's right to exercise the holder's warrants.
PLAN OF DISTRIBUTION
We may sell the offered securities in and outside the United States (1)
through underwriters or dealers, (2) directly to purchasers or (3) through
agents. The prospectus supplement will set forth the following information:
o the terms of the offering;
o the names of any underwriters or agents;
o the name or names of any managing underwriter or underwriters;
o the purchase price of the securities from us;
o the net proceeds we will receive from the sale of the
securities;
o any delayed delivery arrangements;
o any underwriting discounts, commissions and other items
constituting underwriters' compensation;
o the initial public offering price;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any commissions paid to agents.
SALE THROUGH UNDERWRITERS OR DEALERS
If we use underwriters in the sale of the offered securities, the
underwriters will acquire the securities for their own account. The underwriters
may resell the securities from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Underwriters may offer securities
to the public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting as underwriters.
Unless we inform you otherwise in the prospectus supplement, the obligations of
the underwriters to purchase the securities will be subject to several
conditions, and the underwriters will be obligated to purchase all the offered
securities if they purchase any of them. The underwriters may change from time
to time any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers.
If we use underwriters in the sale of the offered securities, rules of
the SEC may limit the ability of the underwriters and certain selling group
members to bid for and purchase our securities until the distribution of the
offered securities is completed. As an exception to these rules, the
underwriters are permitted to engage in certain transactions that stabilize,
maintain or otherwise affect the price of the offered securities.
In connection with an underwritten offering, the underwriters may make
short sales of the offered securities and may purchase our securities on the
open market to cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of securities than they are
required to purchase in the offering. "Covered" short sales are made in an
amount not greater than the over-allotment option we may grant to the
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underwriters in connection with the offering. The underwriters may close out any
covered short position by either exercising the over-allotment option or
purchasing our securities in the open market. In determining the source of
securities to close out the covered short position, the underwriters will
consider, among other things, the price of securities available for purchase in
the open market as compared to the price at which they may purchase securities
through the over-allotment option. "Naked" short sales are sales in excess of
the over-allotment option. The underwriters must close out any naked short
position by purchasing our securities in the open market. A naked short position
is more like to be created if the underwriters are concerned that there may be
downward pressure on the price of the securities in the open market after
pricing that could adversely affect investors who purchase in the offering.
The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase our securities in the open
market to reduce the selling group members' short position or to stabilize the
price of the securities, they may reclaim the amount of the selling concession
from the selling group members who sold those securities as part of the
offering.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of those purchases or those purchases could
prevent or retard a decline in the price of the security. The imposition of a
penalty bid might also have an effect on the price of a security to the extent
that it were to discourage resales of the security.
Neither we nor the underwriters will make any representation or
prediction as to the direction or magnitude of any effect that the transactions
we describe above may have on the price of the offered securities. In addition,
neither we nor the underwriters will make any representation that the
underwriters will engage in these transactions or that these transactions, once
commenced, will not be discontinued without notice.
If we use dealers in the sale of securities, we will sell the
securities to them as principals. They may then resell those securities to the
public at varying prices determined by the dealers at the time of resale. We
will include in the prospectus supplement the names of the dealers and the terms
of the transaction.
DIRECT SALES AND SALES THROUGH AGENTS
We may sell the securities directly. In that event, no underwriters or
agents would be involved. We may also sell the securities through agents we
designate from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the offered securities, and we will
describe any commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to use its
reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act of 1933 with respect to any sale of those securities. We will describe the
terms of any such sales in the prospectus supplement.
DELAYED DELIVERY CONTRACTS
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from selected types of
institutions to purchase securities from us at the public offering price under
delayed delivery contracts. These contracts would provide for payment and
delivery on a specified date in the future. The contracts would be subject only
to those conditions described in the prospectus supplement. The prospectus
supplement will describe the commission payable for solicitation of those
contracts.
GENERAL INFORMATION
We may have agreements with the agents, dealers and underwriters to
indemnify them against civil liabilities, including liabilities under the
Securities Act of 1933, or to contribute with respect to payments that the
agents, dealers or underwriters may be required to make. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of their businesses.
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LEGAL OPINIONS
Baker Botts L.L.P., Houston, Texas, our special U.S. counsel, will
issue an opinion about the legality of any debt securities or warrants we offer
through this prospectus. Durling & Durling, Panama, our Panamanian counsel, will
issue an opinion about the legality of any shares of common stock or preferred
stock we offer through this prospectus. Any underwriters will be advised about
issues relating to any offering by their own legal counsel.
EXPERTS
The financial statements of McDermott incorporated in this prospectus
by reference to the annual report on Form 10-K of McDermott for the year ended
December 31, 2000 have been so incorporated in reliance on the report (which
contains an emphasis of a matter paragraph relating to asbestos-related claims
against McDermott's subsidiary, B&W, recovery of McDermott's investment in B&W
and certain liquidity matters) of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The financial statements of B&W incorporated in this prospectus by
reference to the annual report on Form 10-K of McDermott for the year ended
December 31, 2000 have been so incorporated in reliance on the report (which
contains an explanatory paragraph relating to B&W's ability to continue as a
going concern) of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You can read and copy any materials we file with
the SEC at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain information about the operation of the
SEC's public reference room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a Web site that contains information we file electronically with the
SEC, which you can access over the Internet at http://www.sec.gov. You can also
obtain information about us at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
This prospectus is part of a registration statement we have filed with
the SEC relating to the securities. This prospectus does not contain all the
information the registration statement sets forth or includes in its exhibits
and schedules, in accordance with the rules and regulations of the SEC, and we
refer you to that omitted information. The statements this prospectus makes
pertaining to the content of any contract, agreement or other document that is
an exhibit to the registration statement necessarily are summaries of their
material provisions, and we qualify them in their entirety by reference to those
exhibits for complete statements of their provisions. The registration statement
and its exhibits and schedules are available at the SEC's public reference room
or through its Web site.
The SEC allows us to "incorporate by reference" the information we file
with it, which means we can disclose important information to you by referring
you to those documents. The information we incorporate by reference is an
important part of this prospectus, and later information we file with the SEC
will automatically update and supersede that information. We incorporate by
reference the documents listed below, and any future filings we make with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we sell all the offered securities. The documents we incorporate by
reference are:
o our annual report on Form 10-K for the year ended December 31,
2000, as amended;
o our quarterly reports on Form 10-Q for the quarters ended
March 31 and June 30, 2001; and
o the description of the common stock in our registration
statement on Form 8-A filed on December 7, 1982, as amended.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon written or
oral request, a copy of any or all the documents we incorporate by reference in
this prospectus, other than any exhibit to any of those documents, unless we
have specifically incorporated that exhibit by reference into the information
this prospectus incorporates. You may request copies by writing or telephoning
us at the following address:
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McDermott International, Inc.
1450 Poydras Street
New Orleans, Louisiana 70112-6050
Attention: Corporate Secretary
Telephone: (504) 587-5400
You should rely only on the information we have provided or
incorporated by reference in this prospectus or any prospectus supplement. We
have not authorized any person to provide information other than that provided
in this prospectus or any prospectus supplement. We have not authorized anyone
to provide you with different information. We are not making an offer of the
securities in any jurisdiction where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on its cover page or that any
information contained in any document we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by
reference. Accordingly, we urge you to review each document we subsequently file
with the SEC and incorporate by reference as we describe above for updated
information.
ENFORCEABILITY OF CIVIL LIABILITIES
Although McDermott is a Panama corporation, its principal executive
office is located in, and all of its executive officers and all but one of its
directors are residents of, the United States. Accordingly, investors will be
able to effect service of process within the United States on McDermott.
However, it may be difficult for investors to execute, levy upon or otherwise
satisfy in United States courts, judgments against McDermott obtained in such
courts predicated solely on the civil liability provisions of the United States
securities laws. In the opinion of Durling & Durling, our Panamanian counsel,
Panama courts would enforce judgments of United States courts obtained against
McDermott predicated upon the civil liability provisions of the United States
securities laws, provided that such judgments are approved by the Supreme Court
of Panama. In original actions, however, Panama courts would not impose
liabilities against McDermott predicated solely upon the United States
securities laws.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth expenses payable by McDermott
International, Inc. (the "Company") in connection with the issuance and
distribution of the securities being registered. All the amounts shown are
estimates, except the SEC registration fee.
SEC registration fee..................................................... $ 75,000
NASD fee................................................................. 30,500
NYSE list fees........................................................... 50,000
Printing expenses........................................................ 40,000
Legal fees and expenses.................................................. 80,000
Accounting fees and expenses............................................. 60,000
Fees and expenses of trustee and counsel................................. 20,000
Fees and expenses of transfer agent...................................... 5,000
Rating agency fees....................................................... 50,000
Miscellaneous expenses................................................... 14,500
--------
Total............................................................... $425,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
PANAMA LAW
Under the Civil Code of the Republic of Panama (the "PCC"), an agent is
indemnified against liability incurred in acting without fault or imprudence on
behalf of the agent's principal. It is the opinion of Durling & Durling, our
Panamanian counsel ("Panamanian Counsel"), that this provision would apply to
indemnify directors and officers against liability incurred in connection with
the performance of their duties. According to Panamanian Counsel, Panamanian law
does not recognize the concept of actions brought by shareholders in the right
of the corporation against directors or officers (i.e., derivative actions).
Directors can be held liable to the corporation or shareholders only on demand
made by resolution of the shareholders, which the Company believes is difficult
to achieve in a public company.
BY-LAWS OF THE REGISTRANT
Article VI of the amended and restated by-laws of the Company provides
for the indemnification of officers and directors as follows:
ARTICLE VI
Indemnification
Section 1. Each person (and the heirs, executors and
administrators of such person) who is or was a director or officer of
the Company shall in accordance with Section 2 of this ARTICLE VI be
indemnified by the Company against any and all liability and reasonable
expense that may be paid or incurred by him in connection with or
resulting from any actual or threatened claim, action, suit or
proceeding (whether brought by or in the right of the Company or
otherwise), civil, criminal, administrative or investigative, or in
connection with an appeal relating thereto, in which he may become
involved, as a party or otherwise, by reason of his being or having
been a director or officer of the Company or, if he shall be serving or
shall have served in such capacity at the request of the Company, a
director, officer, employee or agent of another corporation or any
partnership, joint venture, trust or other entity whether or not he
continues to be such at the time such liability or expense shall have
been paid or incurred, provided such
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person acted, in good faith, in a manner he reasonably believed to be
in or not opposed to the best interest of the Company and in addition,
in criminal actions or proceedings, had no reasonable cause to believe
that his conduct was unlawful. As used in this ARTICLE VI, the terms,
"liability" and "expense" shall include, but shall not be limited to,
counsel fees and disbursements and amounts of judgments, fines or
penalties against, and amounts paid in settlement by, such director or
officer. The termination of any actual or threatened claim, action,
suit or proceeding, civil, criminal, administrative, or investigative,
by judgment, settlement (whether with or without court approval),
conviction or upon a plea of guilty or nolo contendere, or its
equivalent, shall not create a presumption that such director or
officer did not meet the standards of conduct set forth in this Section
1.
Section 2. Every such director and officer shall be entitled
to indemnification under Section 1 of this ARTICLE VI with respect to
any claim, action, suit or proceeding of the character described in
such Section 1 in which he may become in any way involved as set forth
in such Section 1, if (i) he has been wholly successful on the merits
or otherwise in respect thereof, or (ii) the Board of Directors acting
by a majority vote of a quorum consisting of directors who are not
parties to (or who have been wholly successful with respect to) such
claim, action, suit or proceeding, finds that such director or officer
has met the standards of conduct set forth in such Section 1 with
respect thereto, or (iii) a court determines that he has met such
standards with respect thereto, or (iv) independent legal counsel (who
may be the regular counsel of the Company) deliver to the Company their
written advice that, in their opinion, he has met such standards with
respect thereto.
Section 3. Expenses incurred with respect to any claim,
action, suit or proceeding of the character described in Section 1 of
this ARTICLE VI may be advanced by the Company prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount unless it is ultimately determined
that he is entitled to indemnification under this ARTICLE VI.
Section 4. The rights of indemnification under this ARTICLE VI
shall be in addition to any rights to which any such director or
officer or any other person may otherwise be entitled by contract or as
a matter of law.
The Company has also entered into indemnification agreements with each
of its directors. These indemnification agreements generally provide the
Company's directors with contractual rights of indemnification and advancement
of expenses consistent with the provisions of Article VI of the Company's
amended and restated by-laws.
Additionally, the Company's articles of incorporation, as amended,
contain a provision that eliminates the personal liability of each director to
the Company or its shareholders for monetary damages for breach of the
director's fiduciary duty as a director, except for liability for (i) any breach
of the director's duty of loyalty to the Company or its shareholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) unlawful payment of dividends or an unlawful
stock purchase or redemption or (iv) any transaction from which that director
derived an improper personal benefit. As a result, shareholders may be unable to
recover monetary damages against directors for negligent or grossly negligent
acts or omissions in violation of their duty of care.
The Company also maintains directors' and officers' liability insurance
for its directors and officers that protects them from certain losses arising
from claims or charges made against them in their capacities as directors or
officers of the Company.
Agreements the Company may enter into with underwriters, dealers and
agents who participate in the distribution of securities of the Company may
contain provisions relating to the indemnification of the Company's officers and
directors.
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ITEM 16. EXHIBITS.*
EXHIBIT NO. DESCRIPTION OF EXHIBIT
*1.1 Form of Underwriting Agreement.
**4.1 Articles of Incorporation, as amended, of McDermott
International, Inc. (incorporated by reference herein to
Exhibit 3.1 to McDermott International, Inc.'s Annual Report
on Form 10-K for the year ended March 31, 1996 (File No.
1-08430)).
4.2 Amended and Restated By-laws of McDermott International, Inc.
4.3 Specimen of Common Stock certificate.
4.4 Form of Indenture relating to the Senior Debt Securities.
4.5 Form of Indenture relating to the Subordinated Debt
Securities.
*5.1 Opinion of Baker Botts L.L.P.
*5.2 Opinion of Durling & Durling.
12.1 Statement showing computation of ratios of earnings to fixed
charges.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
23.3 Consent of Durling & Durling (contained in Exhibit 5.2).
24.1 Powers of Attorney (included on the signature page of this
registration statement).
*25.1 Statement of Eligibility of Trustee on Form T-1.
----------
* The Company will file as an exhibit to a current report on Form 8-K
(i) any underwriting agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any debt securities,
preferred stock or warrants, (iii) any additional required opinion of
counsel to the Company as to the legality of the securities offered
hereby, (iv) any required opinion of counsel to the Company as to
certain tax matters relative to securities offered hereby or (v) any
Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of the applicable trustee.
** Incorporated by reference to the filing indicated.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this registration statement or any material change to such
information in this registration statement;
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provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information required
to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(e) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee under any
indenture relating to the debt securities to act under subsection (a) of Section
310 of the Trust Indenture Act of 1939 (the "Act") in accordance with the rules
and regulations prescribed by the Commission under Section 305(b)(2) of the Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, McDermott
International, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New Orleans, the State of Louisiana, on August
31, 2001.
MCDERMOTT INTERNATIONAL, INC.
By: /s/ BRUCE W. WILKINSON
--------------------------------------
Bruce W. Wilkinson
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Bruce W. Wilkinson, Bruce F.
Longaker and John T. Nesser, III, and each of them severally, his true and
lawful attorney or attorneys-in-fact and agents, with full power to act with or
without the others and with full power of substitution and resubstitution, to
execute in his name, place and stead, in any and all capacities, any or all
amendments (including pre-effective and post-effective amendments) to this
registration statement and any registration statement for the same offering
filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them full power and authority to do and
perform in the name and on behalf of the undersigned, in any and all capacities,
each and every act and thing necessary or desirable to be done in and about the
premises, to all intents and purposes and as fully as he might or could do in
person, hereby ratifying, approving and confirming all that said
attorneys-in-fact and agents or their substitutes may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on August 31, 2001.
Signature Title
-------------------------------------------- -----------------------------------------------------------
/s/ BRUCE W. WILKINSON Chairman of the Board and Chief Executive Officer
-------------------------------------------- and Director
Bruce W. Wilkinson (Principal Executive Officer and Authorized Representative)
/s/ BRUCE F. LONGAKER Executive Vice President and Chief Financial Officer
-------------------------------------------- (Principal Financial and Accounting Officer)
Bruce F. Longaker
/s/ PHILLIP J. BURGUIERES Director
--------------------------------------------
Phillip J. Burguieres
/s/ RONALD C. CAMBRE Director
--------------------------------------------
Ronald C. Cambre
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/s/ BRUCE DEMARS Director
--------------------------------------------
Bruce DeMars
/s/ JOE B. FOSTER Director
--------------------------------------------
Joe B. Foster
/s/ ROBERT L. HOWARD Director
--------------------------------------------
Robert L. Howard
/s/ JOHN W. JOHNSTON, JR. Director
--------------------------------------------
John W. Johnston, Jr.
/s/ JOHN N. TURNER Director
--------------------------------------------
John N. Turner
/s/ RICHARD E. WOOLBERT Director
--------------------------------------------
Richard E. Woolbert
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
*1.1 Form of Underwriting Agreement.
**4.1 Articles of Incorporation, as amended, of McDermott
International, Inc. (incorporated by reference herein to
Exhibit 3.1 to McDermott International, Inc.'s Annual Report
on Form 10-K for the year ended March 31, 1996 (File No.
1-08430)).
4.2 Amended and Restated By-laws of McDermott International, Inc.
4.3 Specimen of Common Stock certificate.
4.4 Form of Indenture relating to the Senior Debt Securities.
4.5 Form of Indenture relating to the Subordinated Debt
Securities.
*5.1 Opinion of Baker Botts L.L.P.
*5.2 Opinion of Durling & Durling.
12.1 Statement showing computation of ratios of earnings to fixed
charges.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
23.3 Consent of Durling & Durling (contained in Exhibit 5.2).
24.1 Powers of Attorney (included on the signature page of this
registration statement).
*25.1 Statement of Eligibility of Trustee on Form T-1.
----------
* The Company will file as an exhibit to a current report on Form 8-K
(i) any underwriting agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any debt securities,
preferred stock or warrants, (iii) any additional required opinion of
counsel to the Company as to the legality of the securities offered
hereby, (iv) any required opinion of counsel to the Company as to
certain tax matters relative to securities offered hereby or (v) any
Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of the applicable trustee.
** Incorporated by reference to the filing indicated.
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3
h90172ex4-2.txt
AMENDED AND RESTATED BY-LAWS
1
EXHIBIT 4.2
AMENDED AND RESTATED
BY-LAWS
OF
McDERMOTT INTERNATIONAL, INC.
(as amended to March 7, 2001 )
ARTICLE I
Meetings of Stockholders
Section 1. The annual and any special meetings of the stockholders
shall be held on the date and at the time and place designated in the notice of
such meetings or in a duly executed waiver of notice thereof.
Section 2. A special meeting of the stockholders may be held at any
time upon the call of the Chief Executive Officer or by order of the Board of
Directors.
Section 3. Whether or not a quorum is present at any stockholders'
meeting, the meeting may be adjourned from time to time by the vote of the
holders of a majority of the voting power of the shares of the outstanding
capital stock of the Company present in person or represented by proxy at the
meeting, as they shall determine.
Section 4. Holders of a majority of the voting power of the shares of
the outstanding capital stock of the Company entitled to vote, present in person
or represented by proxy, shall constitute a quorum for the transaction of all
business at any meeting of the stockholders.
2
2
Section 5. In all matters arising at stockholders' meetings, a majority
of the voting power of the shares of the outstanding capital stock of the
Company present in person or represented by proxy at the meeting shall be
necessary and sufficient for the transaction of any business, except where some
larger percentage is affirmatively required by law or by the certificate of
incorporation.
Section 6. At any meeting of stockholders, the chairman of the meeting
may appoint two inspectors who shall subscribe an oath or affirmation to execute
faithfully the duties of inspectors with strict impartiality and according to
the best of their ability, to canvass the votes on any matter and make and sign
a certificate of the result thereof. No candidate for the office of director
shall be appointed as such inspector with respect to the election of directors.
Such inspectors shall be appointed upon the request of the holders of ten
percent (10%) or more of the voting power of the shares of the outstanding
capital stock of the Company present and entitled to vote on such matter.
Section 7. All elections of directors shall be by ballot. The chairman
of the meeting may cause a vote by ballot to be taken upon any other matter, and
such vote by ballot shall be taken upon the request of the holders of ten
percent (10%) or more of the voting power of the shares of the outstanding
capital stock of the Company present and entitled to vote on such matter.
3
3
Section 8. The meetings of the stockholders shall be presided over by
the Chief Executive Officer, or if he is absent or unable to preside, by the
Chairman and if neither the Chief Executive Officer nor the Chairman is present
or able to preside, then by a Vice Chairman; if more than one Vice Chairman is
present and able to preside the Vice Chairman who shall have held such office
for the longest period of time shall preside; if neither the Chief Executive
Officer nor the Chairman nor a Vice Chairman is present and able to preside,
then the President shall preside; if none of the above is present and able to
preside, then a person shall be elected at the meeting to preside over same. The
Secretary of the Company, if present, shall act as secretary of such meetings
or, if he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the person presiding over the meeting.
The order of business shall be as follows:
(a) Calling of meeting to order
(b) Election of chairman and the appointment of a secretary, if
necessary
(c) Presentation of proof of the due calling of the meeting
(d) Presentation and examination of proxies
(e) Settlement of the minutes of the previous meeting
(f) Reports of officers and committees
4
4
(g) The election of directors, if an annual meeting, or a meeting
called for that purpose
(h) Unfinished business
(i) New business
(j) Adjournment.
Section 9. At every meeting of the stockholders, all proxies shall be
received and taken in charge of and all ballots shall be received and canvassed
by the secretary of the meeting who shall decide all questions touching the
qualification of voters, the validity of the proxies, and the acceptance or
rejection of votes, unless inspectors shall have been appointed, in which event
such inspectors shall perform such duties and decide such questions with respect
to the matter for which they have been appointed.
Section 10. At any meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (a) by or at
the direction of the Board of Directors, or (b) by any stockholder of the
Company of record at the time of giving of the notice provided for in this
Section, who shall be entitled to vote at such meeting and who complies with the
notice procedures set forth in this Section. For business to be properly brought
before a stockholder meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company. To be timely,
a stockholder's notice must be addressed to the attention of the Secretary and
5
5
delivered to or mailed and received at the principal executive offices of the
Company not less than 90 days nor more than 120 days prior to the first
anniversary of the preceding year's annual meeting of stockholders; provided,
however, that if the date of the annual meeting is advanced more than 30 days
prior to or delayed by more than 60 days after such anniversary date, notice by
the stockholder to be timely must be so delivered not earlier than the 120th day
prior to such annual meeting and not later than the close of business on the
later of the 90th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made by
the Company. The stockholder's notice shall set forth (i) the name and address
of the stockholder proposing such business and of the beneficial owner, if any,
on whose behalf the proposal or nomination is made; (ii) a representation that
the stockholder is entitled to vote at such meeting and a statement of the
number of shares of the Company which are owned by the stockholder and the
number of shares which are beneficially owned by the beneficial owner, if any;
(iii) a representation that the stockholder intends to appear in person or by
proxy at the meeting to nominate the person or persons or to propose the
business specified in the notice; and (iv) as to each person the stockholder
proposes to nominate for election or re-election as a director, the name and
address of such person and such other information regarding such nominee as
would be required in a
6
6
proxy statement filed pursuant to the rules of the Securities and Exchange
Commission had such nominee been nominated by the Board of Directors, and a
description of any arrangements or understandings between the stockholder and
such nominee and any other persons (including their names), pursuant to which
the nomination is to be made, and the written consent of each such nominee to
being named in the proxy statement as a nominee and to serve as a director if
elected; or, as to each matter the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting, and any
material interest of the stockholder in such business. The chairman of the
meeting may refuse to permit any business to be brought before an annual meeting
by a stockholder not in compliance with the provisions of this Section.
Notwithstanding the foregoing provisions of this Section, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, and with all other
applicable laws, rules and regulations, with respect to the matters set forth in
this Section.
7
7
ARTICLE II
Directors
Section 1. The business and affairs of the Company shall be managed by
its Board of Directors in accordance with the provisions of the Articles of
Incorporation. The number of Directors shall be as provided in the Articles of
Incorporation.
Section 2. Meetings of the Board of Directors may be called by the
Chairman or by the Chief Executive Officer or by a majority of the directors by
giving notice to each director.
Section 3. Meetings of the Board of Directors shall be presided over by
the Chairman, or if the Chairman so requests or is absent or unable to preside,
by the Chief Executive Officer; if neither the Chairman nor the Chief Executive
Officer is present and able to preside, then by a Vice Chairman; if more than
one Vice Chairman is present and able to preside, the Vice Chairman who shall
have held such office for the longest period of time shall preside; if neither
the Chairman nor the Chief Executive Officer nor a Vice Chairman is present and
able to preside, then the President shall preside; if none of the above is
present and able to preside, then one of the Directors shall be elected at the
meeting to preside over same.
Section 4. Whether or not a quorum is present at any meeting of the
Board of Directors, a majority of the directors present may adjourn the meeting
from time to time as they may determine. Notice need not be given of any such
adjourned
8
8
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken. Any business may be transacted at the adjourned meeting
which might have been transacted at the original meeting.
Section 5. Any committee of the Board of Directors shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Company to the extent provided in the resolution by which
such committee is designated, except that no such committee shall have authority
to alter or amend the By-Laws, or to fill vacancies in either the Board of
Directors or its own membership. In the absence or disqualification of any
member of such a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each such
committee shall meet at stated times or on notice to all by any of its own
number. It shall fix its own rules of procedure. A majority shall constitute a
quorum and the affirmative vote of a majority of those present at a meeting at
which a quorum is present shall be the act of such committee. Each such
committee shall keep minutes of its proceedings.
Section 6. Directors shall receive as compensation for their services
an amount in addition to actual expenses incident
9
9
to the attending of meetings to be fixed by resolution of the Board of
Directors. Nothing in this section shall be construed to preclude a Director
from serving the Company in any other capacity and receiving compensation
therefor.
Section 7. Beginning with the Company's 2001 annual meeting of the
stockholders, no person shall be nominated to stand for election or re-election
to the Company's Board of Directors if such person will have attained the age of
70 prior to the date of election or re-election. Any Director elected or
re-elected at or after the Company's 2001 annual meeting of stockholders who
attains the age 70 during a term to which he or she was elected or re-elected
shall continue to serve as a Director until the first annual meeting of the
stockholders immediately following his or her attainment of the age of 70, at
which time said Director shall be deemed to have resigned and retired from the
Board of Directors.
Section 8. A Director of this Corporation who is, under Section 411(a)
of the Employee Retirement Income Security Act of 1974 of the United States of
America, under a disability to serve as a fiduciary of an employee benefit plan,
as that term is defined in Section 3(3) of said Act shall not serve as a
fiduciary of any such employee benefit plan with respect to which the Company or
any of its subsidiaries is an employer as defined in Section 3(5) of said Act;
and, during the period of such disability, such Director shall be precluded from
acting in any
10
10
manner with respect to any such plan. Any Director who is disabled from serving
as a fiduciary of an employee benefit plan under Section 411(a) of said Act
shall be requested to consent, in writing, to the applicability of this By-Law
to him.
ARTICLE III
Officers
Section 1. The officers of this Company shall be elected annually by
the Board of Directors at its first meeting following the annual meeting of
stockholders or from time to time and shall hold office until their successors
are elected and qualify, or until their earlier death, resignation or removal.
Such officers shall consist of a Chairman of the Board of Directors, a Chief
Executive Officer, one or more Vice Chairmen of the Board of Directors, a
President, one or more Vice Presidents, a Secretary, a Treasurer and one or more
Controllers. In these By-Laws, the Chairman of the Board of Directors is
sometimes referred to as "Chairman", and the Vice Chairman or Vice Chairmen of
the Board of Directors are sometimes referred to as "Vice Chairman" or "Vice
Chairmen", respectively. The Board of Directors may in addition elect at such
meeting or from time to time one or more Assistant Secretaries and one or more
Assistant Treasurers and one or more Assistant Controllers. Any number of
offices may be held by the same person.
11
11
Section 2. The officers shall have such powers and duties as may be
provided in these By-Laws and as may be conferred upon or assigned to them by
the Board of Directors from time to time.
Section 3. The Chairman shall preside over meetings of the Board of
Directors, as stated elsewhere in these By-Laws.
Section 4. The Chief Executive Officer shall preside over meetings of
the shareholders, as stated elsewhere in these By-Laws; subject to the direction
of the Board of Directors, he shall have and exercise direct charge of and
general supervision over all business and affairs of the Company and shall
perform all duties incident to the office of the Chief Executive Officer of a
corporation, and such other duties as may be assigned to him by the Board of
Directors.
Section 5. Each Vice Chairman of the Board of Directors shall have and
exercise such powers and perform such duties as may be conferred upon or
assigned to him by the Board of Directors or by the Chief Executive Officer.
Section 6. The President shall be the Chief Operating Officer of the
Company and shall have and exercise such powers and perform such duties as may
be conferred upon or assigned to him by the Board of Directors or by the Chief
Executive Officer.
Section 7. Each Vice President shall have and exercise such powers and
perform such duties as may be conferred upon or assigned to him by the Board of
Directors or by the Chief Executive Officer.
12
12
Section 8. Each Controller shall have and exercise such powers and
perform such duties as may be conferred upon or assigned to him by the Board of
Directors or by the Chief Executive Officer.
Section 9. The Secretary shall give proper notice of meetings of
stockholders and directors, shall be custodian of the book in which the minutes
of such meetings are kept, and shall perform such other duties as shall be
assigned to him by the Board of Directors or by the Chief Executive Officer.
Section 10. The Treasurer shall keep or cause to be kept accounts of
all monies of the company received or disbursed, shall deposit or cause to be
deposited all monies and other valuables in the name of and to the credit of the
Company in such banks and depositories as the Board of Directors shall
designate, and shall perform such other duties as shall be assigned to him by
the Board of Directors or by the Chief Executive Officer. All checks or other
instruments for the payment of money shall be signed in such a manner as the
Board of Directors may from time to time determine.
Section 11. Any officers of the Company may be removed, with or without
cause, by resolution adopted by the Board of Directors at a meeting called for
that purpose.
13
13
ARTICLE IV
Seals
The corporate seal of this Company shall be a circular seal with the
name of the Company around the border and the word "SEAL" in the center.
ARTICLE V
Any of these By-Laws may be amended, altered or repealed and additional
By-Laws may be adopted by the Board of Directors by the affirmative vote of a
majority of the whole Board cast at a meeting duly held, except that the vote of
two-thirds of the outstanding shares of the Company entitled to vote shall be
required to amend, alter or repeal Section 1 or Section 8 of Article II or this
Article V (as it applies to said Section 1 and 8 of Article II) of these
By-Laws.
ARTICLE VI
Indemnification
Section 1. Each person (and the heirs, executors and administrators of
such person) who is or was a director or officer of the Company shall in
accordance with Section 2 of this Article VI be indemnified by the Company
against any and all liability and reasonable expense that may be paid or
incurred by him in connection with or resulting from any actual or threatened
claim, action, suit or proceeding (whether brought by or in the right of the
Company or otherwise), civil, criminal,
14
14
administrative or investigative, or in connection with an appeal relating
thereto, in which he may become involved, as a party or otherwise, by reason of
his being or having been a director or officer of the Company or, if he shall be
serving or shall have served in such capacity at the request of the Company, a
director, officer, employee or agent of another corporation or any partnership,
joint venture, trust or other entity whether or not he continues to be such at
the time such liability or expense shall have been paid or incurred, provided
such person acted, in good faith, in a manner he reasonably believed to be in or
not opposed to the best interest of the Company and in addition, in criminal
actions or proceedings, had no reasonable cause to believe that his conduct was
unlawful. As used in this ARTICLE VI, the terms, "liability" and "expense" shall
include, but shall not be limited to, counsel fees and disbursements and amounts
of judgments, fines or penalties against, and amounts paid in settlement by,
such director or officer. The termination of any actual or threatened claim,
action, suit or proceeding, civil, criminal, administrative, or investigative,
by judgment, settlement (whether with or without court approval), conviction or
upon a plea of guilty or nolo contendere, or its equivalent, shall not create a
presumption that such director or officer did not meet the standards of conduct
set forth in this Section 1.
Section 2. Every such director and officer shall be entitled to
indemnification under Section 1 of this ARTICLE VI
15
15
with respect to any claim, action, suit or proceeding of the character described
in such Section 1 in which he may become in any way involved as set forth in
such Section 1, if (i) he has been wholly successful on the merits or otherwise
in respect thereof, or (ii) the Board of Directors acting by a majority vote of
a quorum consisting of directors who are not parties to (or who have been wholly
successful with respect to) such claim, action, suit or proceeding, finds that
such director or officer has met the standards of conduct set forth in such
Section 1 with respect thereto, or (iii) a court determines that he has met such
standards with respect thereto, or (iv) independent legal counsel (who may be
the regular counsel of the Company) deliver to the Company their written advice
that, in their opinion, he has met such standards with respect thereto.
Section 3. Expenses incurred with respect to any claim, action, suit or
proceeding of the character described in Section 1 of this ARTICLE VI may be
advanced by the Company prior to the final disposition thereof upon receipt of
an undertaking by or on behalf of the recipient to repay such amount unless it
is ultimately determined that he is entitled to indemnification under this
ARTICLE VI.
Section 4. The rights of indemnification under this ARTICLE VI shall be
in addition to any rights to which any such director or officer or any other
person may otherwise be entitled by contract or as a matter of law.
EX-4.3
4
h90172ex4-3.txt
SPECIMEN OF COMMON STOCK CERTIFICATE
1
EXHIBIT 4.3
NYU [PICTURE] COMMON STOCK
NUMBER 150,000,000 SHARES AUTHORIZED
PAR VALUE ONE DOLLAR
[ ] THIS CERTIFICATE IS TRANSFERABLE SHARES
IN NEW YORK, NEW YORK
McDERMOTT
INTERNATIONAL, INC.
CUSIP 580037 10 9
"Organized under the Laws of the Republic of Panama by Notarial
Document No. 1869 of August 10, 1959, Notary Number One of the
Circuit of Panama, recorded in the Public Registry Office, Section
of Mercantile Persons, at Volume 372, Folio 216, Entry 81.615 on
August 11, 1959."
"The corporation has authority to issue 175,000,000 shares of capital
stock, of which 150,000,000 shares will be Common Stock with a par
value of one dollar ($1.00) per share and 25,000,000 shares will be
Preferred Stock with a par value of one dollar ($1.00) per share to be
issued in one or more series pursuant to Article 3 of the Articles of
Incorporation."
SEE REVERSE FOR CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS OF THE REPUBLIC OF PANAMA
THIS CERTIFIES THAT
is the owner of
FULL PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
McDermott International, Inc. transferable on the books of the Corporation in person or by duly authorized Attorney upon surrender
of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to
all of the provisions of the Certificate of Incorporation, as amended, of the Corporation (copies of which are on file with the
Transfer Agents), to all of which the holder by acceptance hereof assents. This Certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
[Corporate Seal]
Dated
/s/ J. T. NESSER, III /s/ B. W. WILKINSON COUNTERSIGNED AND REGISTERED:
EQUISERVE TRUST COMPANY, N.A.
SECRETARY CHIEF EXECUTIVE OFFICER TRANSFER AGENT
AND REGISTRAR,
BY
AUTHORIZED OFFICER.
2
This certificate also evidences certain Rights as set forth in a Rights
Agreement between McDermott International, Inc. and First Chicago Trust Company
of New York dated as of December 5, 1995 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. The Company will mail to the
holder of this certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
evidenced by separate certificates and no longer be evidenced by this
certificate, may be redeemed or exchanged or may expire. As set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may be null and void.
MCDERMOTT INTERNATIONAL, INC.
A COPY OF THE PROVISIONS SETTING FORTH THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OF THE COMPANY OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS MAY BE OBTAINED
WITHOUT CHARGE FROM EITHER TRANSFER AGENT OR FROM THE SECRETARY OF THE COMPANY.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT- ............Custodian..............
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.........................
in common (State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _______ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-----------------------------------------
----------------------------------------- --------------------------------------
--------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARES
----------------------------------------------------------------------
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
----------------------------------------------
--------------------------------------------------------------------------------
ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED COMPANY
WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED,
-----------------
---------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
EX-4.4
5
h90172ex4-4.txt
FORM OF INDENTURE - RE: SENIOR DEBT SECURITIES
1
EXHIBIT 4.4
FORM OF SENIOR INDENTURE
================================================================================
MCDERMOTT INTERNATIONAL, INC.
as Issuer
and
--------------------------------
as Trustee
----------
Indenture
Dated as of ,
-------------- ----
----------
Debt Securities
================================================================================
2
MCDERMOTT INTERNATIONAL, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF
---------------
----------
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
--------------- -------------
Section 310 (a)(1)......................................................... 7.10
(a)(2)......................................................... 7.10
(a)(3)......................................................... Not Applicable
(a)(4)......................................................... Not Applicable
(a)(5)......................................................... 7.10
(b)............................................................ 7.08, 7.10
Section 311 (a)............................................................ 7.11
(b)............................................................ 7.11
(c)............................................................ Not Applicable
Section 312 (a)............................................................ 2.07
(b)............................................................ 10.03
(c)............................................................ 10.03
Section 313 (a)............................................................ 7.06
(b)............................................................ 7.06
(c)............................................................ 7.06
(d)............................................................ 7.06
Section 314 (a)............................................................ 4.03, 4.04
(b)............................................................ Not Applicable
(c)(1)......................................................... 10.04
(c)(2)......................................................... 10.04
(c)(3)......................................................... Not Applicable
(d)............................................................ Not Applicable
(e)............................................................ 10.05
Section 315 (a)............................................................ 7.01(b)
(b)............................................................ 7.05
(c)............................................................ 7.01(a)
(d)............................................................ 7.01(c)
(d)(1)......................................................... 7.01(c)(1)
(d)(2)......................................................... 7.01(c)(2)
(d)(3)......................................................... 7.01(c)(3)
(e)............................................................ 6.11
Section 316 (a)(1)(A)...................................................... 6.05
(a)(1)(B)...................................................... 6.04
(a)(2)......................................................... Not Applicable
(a)(last sentence)............................................. 2.11
(b)............................................................ 6.07
Section 317 (a)(1)......................................................... 6.08
(a)(2)......................................................... 6.09
(b)............................................................ 2.06
Section 318 (a)............................................................ 10.01
----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
3
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE...................................................1
SECTION 1.01 Definitions.............................................................................1
SECTION 1.02 Other Definitions.......................................................................5
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.......................................5
SECTION 1.04 Rules of Construction...................................................................5
ARTICLE II THE SECURITIES...............................................................................6
SECTION 2.01 Amount Unlimited; Issuable in Series....................................................6
SECTION 2.02 Denominations...........................................................................9
SECTION 2.03 Forms Generally.........................................................................9
SECTION 2.04 Execution, Authentication, Delivery and Dating..........................................9
SECTION 2.05 Registrar and Paying Agent.............................................................11
SECTION 2.06 Paying Agent to Hold Money in Trust....................................................11
SECTION 2.07 Holder Lists...........................................................................12
SECTION 2.08 Transfer and Exchange..................................................................12
SECTION 2.09 Replacement Securities.................................................................13
SECTION 2.10 Outstanding Securities.................................................................13
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities..........13
SECTION 2.12 Temporary Securities...................................................................14
SECTION 2.13 Cancellation...........................................................................14
SECTION 2.14 Payments; Defaulted Interest...........................................................14
SECTION 2.15 Persons Deemed Owners..................................................................15
SECTION 2.16 Computation of Interest................................................................15
SECTION 2.17 Global Securities; Book-Entry Provisions...............................................15
ARTICLE III REDEMPTION..................................................................................17
SECTION 3.01 Applicability of Article...............................................................17
SECTION 3.02 Notice to the Trustee..................................................................17
SECTION 3.03 Selection of Securities To Be Redeemed.................................................18
SECTION 3.04 Notice of Redemption...................................................................18
SECTION 3.05 Effect of Notice of Redemption.........................................................19
SECTION 3.06 Deposit of Redemption Price............................................................19
SECTION 3.07 Securities Redeemed or Purchased in Part...............................................19
SECTION 3.08 Purchase of Securities.................................................................20
SECTION 3.09 Mandatory and Optional Sinking Funds...................................................20
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities..................................20
SECTION 3.11 Redemption of Securities for Sinking Fund..............................................20
ARTICLE IV COVENANTS...................................................................................21
SECTION 4.01 Payment of Securities..................................................................21
SECTION 4.02 Maintenance of Office or Agency........................................................22
i
4
SECTION 4.03 SEC Reports; Financial Statements......................................................22
SECTION 4.04 Compliance Certificate.................................................................22
SECTION 4.05 Existence..............................................................................23
SECTION 4.06 Waiver of Stay, Extension or Usury Laws................................................23
SECTION 4.07 Additional Amounts.....................................................................23
ARTICLE V SUCCESSORS..................................................................................24
SECTION 5.01 Limitations on Mergers, Consolidations and Other Transactions..........................24
SECTION 5.02 Successor Person Substituted...........................................................25
ARTICLE VI DEFAULTS AND REMEDIES.......................................................................25
SECTION 6.01 Events of Default......................................................................25
SECTION 6.02 Acceleration...........................................................................27
SECTION 6.03 Other Remedies.........................................................................27
SECTION 6.04 Waiver of Defaults.....................................................................28
SECTION 6.05 Control by Majority....................................................................28
SECTION 6.06 Limitations on Suits...................................................................28
SECTION 6.07 Rights of Holders to Receive Payment...................................................29
SECTION 6.08 Collection Suit by Trustee.............................................................29
SECTION 6.09 Trustee May File Proofs of Claim.......................................................29
SECTION 6.10 Priorities.............................................................................30
SECTION 6.11 Undertaking for Costs..................................................................31
ARTICLE VII TRUSTEE.....................................................................................31
SECTION 7.01 Duties of Trustee......................................................................31
SECTION 7.02 Rights of Trustee......................................................................32
SECTION 7.03 May Hold Securities....................................................................32
SECTION 7.04 Trustee's Disclaimer...................................................................33
SECTION 7.05 Notice of Defaults.....................................................................33
SECTION 7.06 Reports by Trustee to Holders..........................................................33
SECTION 7.07 Compensation and Indemnity.............................................................33
SECTION 7.08 Replacement of Trustee.................................................................34
SECTION 7.09 Successor Trustee by Merger, etc.......................................................36
SECTION 7.10 Eligibility; Disqualification..........................................................36
SECTION 7.11 Preferential Collection of Claims Against Company......................................36
ARTICLE VIII DISCHARGE OF INDENTURE......................................................................36
SECTION 8.01 Termination of Company's Obligations...................................................36
SECTION 8.02 Application of Trust Money.............................................................40
SECTION 8.03 Repayment to Company...................................................................40
SECTION 8.04 Reinstatement..........................................................................41
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS......................................................41
SECTION 9.01 Without Consent of Holders.............................................................41
SECTION 9.02 With Consent of Holders................................................................42
SECTION 9.03 Compliance with Trust Indenture Act....................................................44
SECTION 9.04 Revocation and Effect of Consents......................................................44
ii
5
SECTION 9.05 Notation on or Exchange of Securities..................................................45
SECTION 9.06 Trustee to Sign Amendments, etc........................................................45
ARTICLE X MISCELLANEOUS...............................................................................45
SECTION 10.01 Trust Indenture Act Controls...........................................................45
SECTION 10.02 Notices................................................................................45
SECTION 10.03 Communication by Holders with Other Holders............................................46
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.....................................46
SECTION 10.05 Statements Required in Certificate or Opinion..........................................47
SECTION 10.06 Rules by Trustee and Agents............................................................47
SECTION 10.07 Legal Holidays.........................................................................47
SECTION 10.08 No Recourse Against Others.............................................................47
SECTION 10.09 Governing Law..........................................................................48
SECTION 10.10 No Adverse Interpretation of Other Agreements..........................................48
SECTION 10.11 Successors.............................................................................48
SECTION 10.12 Severability...........................................................................48
SECTION 10.13 Counterpart Originals..................................................................48
SECTION 10.14 Table of Contents, Headings, etc.......................................................48
iii
6
INDENTURE dated as of _______________ between McDermott International,
Inc., a corporation organized under the laws of the Republic of Panama (the
"Company"), and ____________________, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's unsecured debentures,
notes or other evidences of indebtedness (the "Securities") to be issued from
time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the express
terms of a Security or by or pursuant to a Board Resolution, under circumstances
specified therein or pursuant thereto, to be paid by the Company with respect to
certain taxes, assessments or other governmental charges imposed on certain
Holders and that are owing to those Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, that specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of that
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing."Agent" means any
Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any similar
federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized, with respect to any particular matter, to act
by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of that
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
that successor corporation;
1
7
provided, however, that for purposes of any provision contained herein which is
required by the TIA, "Company" shall also mean each other obligor (if any) on
the Securities of a series.
"Company Order" and "Company Request" mean, respectively, a written order
or request signed in the name of the Company by two Officers of the Company, and
delivered to the Trustee.
"Corporate Trust Office" of the Trustee means the office of the Trustee
located at ____________________, and as may be located at such other address as
the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in global form, the Person specified pursuant to
Section 2.01 hereof as the initial Depositary with respect to the Securities of
that series, until a successor shall have been appointed and become such
pursuant to the applicable provision of this Indenture, and thereafter
"Depositary" shall mean or include that successor.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Security" of any series means a Security of that Series that is
issued in global form in the name of the Depositary with respect thereto or its
nominee.
"Government Obligations" means, with respect to a series of Securities,
direct obligations of the government that issues the currency in which the
Securities of the series are payable for the payment of which the full faith and
credit of that government is pledged, or obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of that government, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by that government.
"Holder" means a Person in whose name a Security is registered.
"Indenture" means this Indenture as amended or supplemented from time to
time pursuant to the provisions hereof, and includes the terms of a particular
series of Securities established as contemplated by Section 2.01.
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"interest" means, with respect to an Original Issue Discount Security that
by its terms bears interest only after Maturity, interest payable after
Maturity.
"Interest Payment Date," when used with respect to any Security, shall have
the meaning assigned to that term in the Security as contemplated by Section
2.01.
"Issue Date" means, with respect to Securities of a series, the date on
which the Securities of that series are originally issued under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York, _______________, New
Orleans, Louisiana or a Place of Payment are authorized or obligated by law,
regulation or executive order to remain closed.
"Maturity" means, with respect to any Security, the date on which the
principal of that Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity thereof,
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice Chairman
of the Board, any Vice President, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Assistant
Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of a
Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. That counsel may be an employee of or
counsel to the Company or the Trustee.
"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable on a
declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where, subject to the provisions of Section 4.02, the principal
of, premium (if any) on and interest on the Securities of that series are
payable as specified in accordance with Section 2.01.
"principal" of a Security means the principal of the Security plus, when
appropriate, the premium, if any, on the Security.
"Redemption Date" means, with respect to any Security to be redeemed, the
date fixed for that redemption by or pursuant to this Indenture.
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"Redemption Price" means, with respect to any Security to be redeemed, the
price at which it is to be redeemed pursuant to this Indenture.
"Rule 144A Securities" means Securities of a series designated pursuant to
Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture.
"Security Custodian" means, with respect to Securities of a series issued
in global form, the Trustee for Securities of that series, as custodian with
respect to the Securities of that series, or any successor entity thereto.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in that
Security as the fixed date on which the principal of that Security or that
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock that ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has that voting power by reason of any
contingency.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections
77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture, and
thereafter "Trustee" means each Person who is then a Trustee hereunder, and if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series means the Trustee with respect to Securities of
that series.
"United States" means the United States of America (including the States
and the District of Columbia) and its territories and possessions (including
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands).
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" means Government Obligations with respect to
Securities payable in Dollars.
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SECTION 1.02 Other Definitions.
DEFINED
DEFINED TERM IN SECTION
------------ ----------
"Bankruptcy Custodian".................................................................... 6.01
"Conversion Event"........................................................................ 6.01
"covenant defeasance"..................................................................... 8.01
"Event of Default"........................................................................ 6.01
"Exchange Rate"........................................................................... 2.11
"Judgment Currency"....................................................................... 6.10
"legal defeasance"........................................................................ 8.01
"mandatory sinking fund payment".......................................................... 3.09
"optional sinking fund payment"........................................................... 3.09
"Paying Agent"............................................................................ 2.05
"Registrar"............................................................................... 2.05
"Required Currency"....................................................................... 6.10
"Successor"............................................................................... 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined by a
TIA reference to another statute or defined by an SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this instrument to Articles and Sections are
references to the corresponding Articles and Sections in and of this
instrument.
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth, or determined
in a manner provided, in an Officers' Certificate or in a Company Order, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from the Securities of all other series);
(2) if there is to be a limit, the limit on the aggregate principal
amount of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered on registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12,
2.17, 3.07 or 9.05 and except for any Securities that, pursuant to Section
2.04 or 2.17, are deemed never to have been authenticated and delivered
hereunder); provided, however, that unless otherwise provided in the terms
of the series, the authorized aggregate principal amount of that series may
be increased before or after the issuance of any Securities of the series
by a Board Resolution (or action pursuant to a Board Resolution) to that
effect;
(3) whether any Securities of the series are to be issuable initially
in temporary global form and whether any Securities of the series are to be
issuable in permanent global form, as Global Securities or otherwise, and,
if so, whether beneficial owners of interests in any such Global Security
may exchange those interests for Securities of that series and of like
tenor of any authorized form and denomination and the circumstances under
which those exchanges may occur, if other than in the manner provided in
Section 2.17, and the initial Depositary and Security Custodian, if any,
for any Global Security or Securities of that series;
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(4) (i) if other than provided herein, the Person to whom any interest
on Securities of the series shall be payable, and (ii) the manner in which
any interest payable on a temporary Global Security on any Interest Payment
Date will be paid if other than in the manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to those
Securities shall be payable, the date or dates from which that interest
shall accrue, the Interest Payment Dates on which that interest shall be
payable and the record date for the interest payable on any Securities on
any Interest Payment Date;
(7) the place or places where, subject to the provisions of Section
4.02, the principal of, premium (if any) and interest on and any Additional
Amounts with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions on which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company may exercise any such option,
if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions on which Securities of
the series shall be redeemed, purchased or repaid in whole or in part
pursuant to that obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which any Securities of that series shall be
issuable;
(11) if other than Dollars, the currency or currencies (including
composite currencies) or the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or
property of the Company or any other Person, in which payment of the
principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies (including composite currencies) other than that in which the
Securities are stated to be payable, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to Securities of that
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series as to which that election is made shall be payable, and the periods
within which and the terms and conditions on which that election is to be
made;
(13) if the amount of payments of principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series may be determined with reference to any commodities, currencies or
indices, values, rates or prices or any other index or formula, the manner
in which those amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable on
declaration of acceleration of the Maturity thereof pursuant to Section
6.02;
(15) any additional means of satisfaction and discharge of this
Indenture and any additional conditions or limitations to discharge with
respect to Securities of the series pursuant to Article VIII or any
modifications of or deletions from those conditions or limitations;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.01 or covenants of the Company set forth in
Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer
or exchange of Securities of the series, which may amend, supplement,
modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or
exchangeable for Capital Stock, other debt securities (including
Securities), warrants, other equity securities or any other securities or
property of the Company or any other Person, at the option of the Company
or the Holder or on the occurrence of any condition or event, the terms and
conditions for that conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit
of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be
prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 2.03) set forth, or
determined in the manner provided, in the Officers' Certificate or Company Order
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of that action together
with that Board Resolution shall be set forth in an Officers' Certificate or
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate or Company Order setting forth the terms of the series.
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SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 2.01. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series denominated in Dollars shall be issuable in denominations of $1,000 and
any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in
substantially the form or forms (including temporary or permanent global form)
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto. The Securities may have notations, legends or endorsements
required by law, securities exchange rule, the Company's certificate of
incorporation, bylaws or other similar governing documents, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). A copy of the
Board Resolution establishing the form or forms of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of those
Securities.
The definitive Securities of each series shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the Officers executing those Securities, as evidenced by their
execution thereof.
The Trustee's certificate of authentication shall be in substantially the
following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
-------------------------
By:
-------------------------------------
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities of each series on
behalf of the Company by manual or facsimile signature. The Company's seal, if
any, shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
If an Officer of the Company whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose until authenticated by the manual signature
of an authorized signatory of the Trustee, which signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
Notwithstanding the foregoing, if any Security has been authenticated and
delivered hereunder but never issued and sold by the Company, and the
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Company delivers that Security to the Trustee for cancellation as provided in
Section 2.13 together with a written statement (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture that Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall authenticate
and deliver those Securities for original issue on a Company Order for the
authentication and delivery of those Securities or pursuant to such procedures
reasonably acceptable to the Trustee as may be specified from time to time by
Company Order. That order shall specify the amount of the Securities to be
authenticated, the date on which the original issue of Securities is to be
authenticated, the name or names of the initial Holder or Holders and any other
terms of the Securities of that series not otherwise determined. If provided for
in those procedures, that Company Order may authorize (1) authentication and
delivery of Securities of that series for original issue from time to time, with
certain terms (including, without limitation, the Maturity date or dates,
original issue date or dates and interest rate or rates) that differ from
Security to Security and (2) may authorize authentication and delivery pursuant
to oral or electronic instructions from the Company or its duly authorized
agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been established
in or pursuant to one or more Board Resolutions as permitted by Section 2.01, in
authenticating those Securities, and accepting the additional responsibilities
under this Indenture in relation to those Securities, the Trustee shall be
entitled to receive (in addition to the Company Order referred to above and the
other documents required by Section 10.04), and (subject to Section 7.01) shall
be fully protected in relying on,
(a) an Officers' Certificate setting forth the Board Resolution and,
if applicable, an appropriate record of any action taken pursuant thereto,
as contemplated by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of those Securities has been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such form has been established in conformity with the provisions of
this Indenture;
(ii) if the terms of those Securities have been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(iii) those Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in that Opinion of Counsel, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms,
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except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws in effect from time to time affecting
the rights of creditors generally, and the application of general
principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law).
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Officers' Certificate and Opinion of
Counsel at the time of issuance of each such Security, but that Officers'
Certificate and Opinion of Counsel shall be delivered at or before the time of
issuance of the first Security of the series to be issued.
The Trustee shall not be required to authenticate those Securities if the
issuance of those Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless limited by the terms of that appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by that agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of
Securities where Securities of that series may be presented for registration of
transfer or exchange ("Registrar") and an office or agency where Securities of
that series may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities of that series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar, and
the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to that Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent.
SECTION 2.06 Paying Agent to Hold Money in Trust.
With respect to each series of Securities, the Company shall require each
Paying Agent other than the Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit
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of Holders of Securities of that series or the Trustee all money held by the
Paying Agent for the payment of principal of, premium, if any, or interest on or
any Additional Amounts with respect to Securities of that series and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. Upon payment over to the Trustee and
upon accounting for any funds disbursed, the Paying Agent (if other than the
Company or a Subsidiary of the Company) shall have no further liability for the
money. If the Company or a Subsidiary of the Company acts as Paying Agent with
respect to a series of Securities, it shall segregate and hold in a separate
trust fund for the benefit of the Holders of Securities of that series all money
held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA
Section 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of each series of Securities and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar with respect to a series of
Securities, the Company shall furnish to the Trustee at least five Business Days
before each Interest Payment Date with respect to that series of Securities, and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Securities of that series, and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to
Section 2.01, when Securities of any series are presented to the Registrar with
the request to register the transfer of those Securities or to exchange those
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements and the
requirements of this Indenture for those transactions are met; provided,
however, that the Securities presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form reasonably satisfactory to the Registrar duly
executed by the Holder thereof or by his attorney, duly authorized in writing,
on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's written
request and submission of the Securities (other than Global Securities). No
service charge shall be made to a Holder for any registration of transfer or
exchange (except as otherwise expressly permitted herein), but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than such transfer
tax or similar governmental charge payable on exchanges pursuant to Section
2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in accordance
with the provisions of Section 2.04. Notwithstanding any other provisions of
this Indenture to the contrary, the Company shall not be required to register
the transfer or exchange of (a) any Security selected for redemption in whole or
in part
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pursuant to Article III, except the unredeemed portion of any Security being
redeemed in part or (b) any Security during the period beginning 15 Business
Days before the mailing of notice of any offer to repurchase Securities of the
series required pursuant to the terms thereof or of redemption of Securities of
a series to be redeemed and ending at the close of business on the date of
mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the Holder
of a Security claims that the Security has been destroyed, lost or stolen and
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of that Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay that Security. If
required by the Trustee or the Company, the Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.10 as not
outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section
4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and
Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal amount of an Original Issue Discount Security shall
be the principal amount thereof that would be due and payable as of the date of
that determination upon acceleration of the Maturity thereof pursuant to Section
6.02, (b) the principal amount of a Security denominated in a foreign currency
shall be the Dollar equivalent, as determined by the Company by reference to the
noon
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buying rate in The City of New York for cable transfers for that currency, as
that rate is certified for customs purposes by the Federal Reserve Bank of New
York (the "Exchange Rate") on the date of original issuance of that Security, of
the principal amount (or, in the case of an Original Issue Discount Security,
the Dollar equivalent, as determined by the Company by reference to the Exchange
Rate on the date of original issuance of that Security, of the amount determined
as provided in (a) above), of that Security and (c) Securities owned by the
Company or any other obligor on the Securities or any Affiliate of the Company
or of that other obligor shall be disregarded, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Securities that the
Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment or redemption or for credit against any sinking fund payment. The
Trustee shall cancel all Securities surrendered for registration of transfer,
exchange, payment, redemption, replacement or cancellation or for credit against
any sinking fund. Unless the Company shall direct in writing that canceled
Securities be returned to it, after written notice to the Company all canceled
Securities held by the Trustee shall be disposed of in accordance with the usual
disposal procedures of the Trustee, and the Trustee shall maintain a record of
their disposal. The Company may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
Unless otherwise provided as contemplated by Section 2.01 with respect to
the Securities of any series, interest (except defaulted interest) on any
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Persons who are registered Holders of
that Security at the close of business on the record date next preceding that
Interest Payment Date, even if those Securities are canceled after that record
date and on or before that Interest Payment Date. Unless otherwise provided with
respect to the Securities of any series, the Company will pay the principal of,
premium (if any) and interest on and any Additional Amounts with respect to the
Securities in Dollars. Those amounts shall be payable at the offices of the
Trustee, provided that at the option of the Company, the Company may pay those
amounts (1) by wire transfer with respect to Global Securities or (2) by check
payable in that money mailed to a Holder's registered address with respect to
any Securities.
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If the Company defaults in a payment of interest on the Securities of any
series, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest on the defaulted interest, in each case at the rate
provided in the Securities of that series and in Section 4.01. The Company may
pay the defaulted interest to the Persons who are Holders on a subsequent
special record date. At least 15 days before any special record date selected by
the Company, the Company (or the Trustee, in the name of and at the expense of
the Company upon 20 days' prior written notice from the Company setting forth
that record date and the interest amount to be paid) shall mail to Holders of
any such series of Securities a notice that states the special record date, the
related payment date and the amount of that interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may treat
the Person in whose name any Security is registered as the owner of that
Security for the purpose of receiving payments of principal of, premium (if any)
or interest on, or any Additional Amounts with respect to that Security and for
all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global Security,
as contemplated by Section 2.01, then, notwithstanding clause (10) of Section
2.01 and the provisions of Section 2.02, any such Global Security shall
represent those of the outstanding Securities of that series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee (i) in such manner and upon instructions
given by such Person or Persons as shall be specified in that Security or in a
Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii)
otherwise in accordance with written instructions or such other written form of
instructions as is customary for the Depositary for that Security, from that
Depositary or its nominee on behalf of any Person having a beneficial interest
in that Global Security. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.12, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given by the Person
or Persons specified in that Security or in the applicable Company Order. With
respect to the Securities of any series that are represented by a Global
Security, the Company authorizes the execution and delivery by the Trustee of a
letter of representations or other similar agreement or instrument in the form
customarily provided for by the Depositary appointed with respect to that Global
Security. Any Global Security may be deposited with the Depositary or its
nominee, or may remain in the custody of the Trustee or the
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Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or
similar agreement between the Trustee and the Depositary. If a Company Order has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 10.05 and need not be
accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee or the Security Custodian as its
custodian, or under that Global Security, and the Depositary may be treated by
the Company, the Trustee or the Security Custodian and any agent of the Company,
the Trustee or the Security Custodian as the absolute owner of that Global
Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the
registered holder of a Global Security of any series may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action that a Holder of
Securities of that series is entitled to take under this Indenture or the
Securities of that series and (ii) nothing herein shall prevent the Company, the
Trustee or the Security Custodian or any agent of the Company, the Trustee, or
the Security Custodian from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided pursuant to
Section 2.01, transfers of a Global Security shall be limited to transfers of
that Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities of any series shall be transferred to all
beneficial owners of a Global Security of that series in exchange for their
beneficial interests in that Global Security if, and only if, either (1) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for that Global Security and a successor Depositary is not appointed
by the Company within 90 days of that notice, (2) an Event of Default has
occurred with respect to that series and is continuing and the Registrar has
received a request from the Depositary to issue Securities of that series in
lieu of all or a portion of that Global Security (in which case the Company
shall deliver Securities of that series within 30 days of that request) or (3)
the Company determines not to have the Securities of that series represented by
a Global Security.
In connection with any transfer of a portion of the beneficial interests in
a Global Security to beneficial owners pursuant to this Section 2.17, the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee on receipt of a Company Order for the
authentication and delivery of Securities shall authenticate and deliver, one or
more Securities of the same series of like tenor and amount.
In connection with the transfer of all the beneficial interests in a Global
Security of any series to beneficial owners pursuant to this Section 2.17, the
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
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for its beneficial interest in the Global Security, an equal aggregate principal
amount of Securities of that series of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities by the Depositary, or for maintaining, supervising or reviewing
any records of the Depositary relating to those Securities. Neither the Company
nor the Trustee shall be liable for any delay by the related Global Security
Holder or the Depositary in identifying the beneficial owners, and each such
Person may conclusively rely on, and shall be protected in relying on,
instructions from that Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of Section 2.04
shall apply to any Global Security if that Global Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 10.05 and
need not be accompanied by an Opinion of Counsel) with regard to the
cancellation or reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise
specified as contemplated by Section 2.01 with respect to Securities of any
series, payment of principal of and premium (if any) and interest on and any
Additional Amounts with respect to any Global Security shall be made to the
Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 2.01 for Securities of any series) in
accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to this
Indenture, it shall notify the Trustee of the Redemption Date and principal
amount of Securities of that series to be redeemed. The Company shall so notify
the Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) by delivering to the Trustee an Officers'
Certificate stating that the redemption will comply with the provisions of this
Indenture and of the Securities of that series. Any such notice may be canceled
at any time prior to the mailing of that notice of redemption to any Holder of
the Securities of that series and shall thereupon be void and of no effect.
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SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all of the Securities of that series of a specified tenor are to be redeemed),
the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities of
that series (and tenor) not previously called for redemption, either pro rata,
by lot or by such other method as the Trustee shall deem fair and appropriate.
That redemption may provide for the selection for redemption of portions (equal
to the minimum authorized denomination for Securities of that series or any
integral multiple thereof) of the principal amount of Securities of that series
of a denomination larger than the minimum authorized denomination for Securities
of that series or of the principal amount of Global Securities of that series.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all
provisions relating to redemption of Securities of any series shall relate, in
the case of any of the Securities redeemed or to be redeemed only in part, to
the portion of the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities of a series to be redeemed, at the address of that
Holder appearing in the register of Securities for that series maintained by the
Registrar.
All notices of redemption shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of those Securities is to receive payment of the Redemption Price on
surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the
principal amount thereof to be redeemed and that on and after the
Redemption Date, on surrender for cancellation of that Security to the
Paying Agent, a new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;
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(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if that is
the case; and
(7) the CUSIP number, if any, relating to those Securities.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, those Securities called for redemption shall be
paid at the Redemption Price, but interest installments whose maturity is on or
prior to that Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions thereof
which are to be redeemed on that date, other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of that Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not those Securities are presented for payment, and
the Holders of those Securities shall have no further rights with respect to
those Securities except for the right to receive the Redemption Price on
surrender of those Securities. If any Security called for redemption shall not
be so paid on surrender thereof for redemption, the principal of and premium, if
any, any Additional Amounts, and, to the extent lawful, accrued interest thereon
shall, until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or provided in the Securities or, in the case of
Original Issue Discount Securities, their initial yield to maturity.
SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in part,
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of that Security without service charge a new Security or Securities, of
the same series and of any authorized
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denomination as requested by that Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the Company and
any Affiliate of the Company may at any time purchase or otherwise acquire
Securities in the open market or by private agreement. Any such acquisition
shall not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by those Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee for cancellation and, on
that cancellation, the indebtedness represented thereby shall be deemed to be
satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of the minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." Unless otherwise provided by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 3.10. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of that series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than any
previously called for redemption) and may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant to
the terms of those Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of those Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of that series required to be made pursuant to the terms of that
series of Securities; provided that those Securities have not been previously so
credited. Those Securities shall be received and credited for that purpose by
the Trustee at the Redemption Price specified in those Securities for redemption
through operation of the sinking fund, and the amount of that sinking fund
payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be satisfactory
to the Trustee) to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate of the Company
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, that is to be
satisfied by payment of cash and the portion thereof, if any, that is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver to the Trustee any Securities to be so
delivered. Failure of the Company to timely deliver that Officers' Certificate
and Securities specified in this paragraph, if any, shall not
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constitute a default but shall constitute the election of the Company (i) that
the mandatory sinking fund payment for that series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of that series in respect thereof and (ii) that the
Company will make no optional sinking fund payment with respect to that series
as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed
$100,000 (or the Dollar equivalent thereof based on the applicable Exchange Rate
on the date of original issue of the applicable Securities) or a lesser sum if
the Company shall so request with respect to the Securities of any particular
series, that cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of that series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If that amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Company makes no such request, then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed on that
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.04. That notice having been
duly given, the redemption of those Securities shall be made on the terms and in
the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest on
and any Additional Amounts with respect to the Securities of each series on the
dates and in the manner provided in the Securities of that series and in this
Indenture. Principal, premium, interest and any Additional Amounts shall be
considered paid on the date due if the Paying Agent, other than the Company or a
Subsidiary of the Company, holds on that date money deposited by the Company
designated for and sufficient to pay all principal, premium (if any), interest
and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal of and premium (if
any) on Securities of any series, at a rate equal to the then applicable
interest rate on the Securities of that series to the extent lawful; and it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest on and any overdue payments
of Additional Amounts with respect to Securities of that series (without regard
to any applicable grace period) at the same rate to the extent lawful.
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SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities of that series may be presented
for registration of transfer or exchange, where Securities of that series may be
presented for payment and where notices and demands to or on the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
that office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof is located at ____________________. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of that office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, those presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all those purposes and may from time to time rescind
those designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for those
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it
files the same with the SEC, copies of the annual reports and the
information, documents and other reports (or copies of those portions of
any of the foregoing as the SEC may by rules and regulations prescribe)
that the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act. The Company shall also comply with the
provisions of TIA Section 314(a).
(b) If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule
144A Securities and prospective purchasers of Rule 144A Securities
designated by the Holders of Rule 144A Securities, promptly on their
request, the information required to be delivered pursuant to Rule
144A(d)(4) promulgated under the Securities Act of 1933, as amended.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a statement signed by an
Officer of the Company, which need not constitute an Officers' Certificate,
complying with TIA Section 314(a)(4) and stating that, in the course of
performance by the signing Officer of the Company of his or her duties as
such Officer of the Company, he or she would normally obtain knowledge of
the keeping, observing, performing and fulfilling by the Company of its
obligations under this Indenture, and further stating that, to the best of
his or her knowledge, the
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Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which that Officer may have knowledge and
what action the Company is taking or proposes to take with respect
thereto).
(b) The Company shall, so long as Securities of any series are
outstanding, deliver to the Trustee, promptly on any Officer of the Company
becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying that Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Existence.
Subject to Article V hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
the existence of each of its Subsidiaries and all rights (charter and statutory)
of the Company and its Subsidiaries, provided that the Company shall not be
required to preserve the existence of any Subsidiary of the Company or any such
right if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries
taken as a whole and that the loss thereof would not have a material adverse
effect on the business, operations, assets or financial condition of the Company
and its Subsidiaries taken as a whole and would not have any material adverse
effect on the payment and performance of the obligations of the Company under
the Securities and this Indenture.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist on, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of that
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
that mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this
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Section 4.07 to the extent that, in that context, Additional Amounts are, were
or would be payable in respect thereof pursuant to the provisions of this
Section 4.07, and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where that express mention is not
made.
Unless otherwise provided pursuant to Section 2.01 with respect to
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least ten days prior to the first Interest Payment
Date with respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least ten days prior to
each date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether that payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of that
series. If any such withholding shall be required, then that Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on those payments to those Holders of Securities, and the Company will pay to
that Paying Agent the Additional Amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for and to hold them
harmless against any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 4.07.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers, Consolidations and Other Transactions.
The Company shall not, in any transaction or series of related
transactions, consolidate with any other Person into, or merge into, any other
Person, or sell, lease, convey, transfer or otherwise dispose of its assets
substantially as an entirety to any Person, unless:
(1) the Person formed by that consolidation or into which the Company
is merged, or to which that sale, lease, conveyance, transfer or other
disposition shall be made (collectively, the "Successor"), expressly
assumes by supplemental indenture the due and punctual payment of the
principal of (and premium, if any) and interest on and Additional Amounts
with respect to all the Securities and the performance of the Company's
covenants and obligations under this Indenture and the Securities;
(2) immediately after giving effect to that transaction or series of
related transactions, no Default or Event of Default shall have occurred
and be continuing; and
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(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the transaction and that
supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease,
conveyance, transfer or other disposition of the assets of the Company
substantially as an entirety in accordance with Section 5.01, any Successor
formed by that consolidation or into or with which the Company is merged or to
which that sale, lease, conveyance, transfer or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under this Indenture and the Securities with the same effect as if
that Successor had been named as the Company herein and the predecessor Company,
in the case of a sale, conveyance, transfer or other disposition, shall be
released from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically deleted
or modified in or pursuant to the supplemental indenture or Board Resolution
establishing that series of Securities or in the form of Security for that
series, an "Event of Default," wherever used herein with respect to Securities
of any series, occurs if:
(1) the Company defaults in the payment of interest on or any
Additional Amounts with respect to any Security of that series when the
same becomes due and payable and that default continues for a period of 30
days;
(2) the Company defaults in the payment of (A) the principal of any
Security of that series at its Maturity or (B) premium (if any) on any
Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series, and that default
continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants or
agreements in, or provisions of, the Securities of that series or this
Indenture (other than an agreement, covenant or provision that has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series) which shall not have been
remedied within the specified period after written notice, as specified in
the last paragraph of this Section 6.01;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that remains unstayed and in effect for 90 days and
that:
(A) is for relief against the Company as debtor in an involuntary
case,
(B) appoints a Bankruptcy Custodian of the Company or a
Bankruptcy Custodian for all or substantially all of the property of
the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default unless
a Trust Officer at the Corporate Trust Office of the Trustee receives written
notice at the Corporate Trust Office of the Trustee of that Default with
specific reference to that Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the
principal of, premium (if any) or interest on or Additional Amounts with respect
to any Security is payable in a currency or currencies (including a composite
currency) other than Dollars and such currency or currencies are not available
to the Company for making payment thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company (a "Conversion
Event"), the Company will be entitled to satisfy its obligations to Holders of
the Securities by making that payment in Dollars in an amount equal to the
Dollar equivalent of the amount payable in such other currency, as determined by
the Company by reference to the Exchange Rate on the date of that payment, or,
if that rate is not then available, on the basis of the most recently available
Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01,
any payment made under such circumstances in Dollars where the required payment
is in a currency other than Dollars will not constitute an Event of Default
under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall give
written notice thereof to the Trustee; and the Trustee, promptly after receipt
of that notice, shall give notice thereof in the manner provided in Section
10.02 to the Holders. Promptly after the making of any payment in Dollars as a
result of a Conversion Event, the Company shall give
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notice in the manner provided in Section 10.02 to the Holders, setting forth the
applicable Exchange Rate and describing the calculation of those payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event of
Default until the Trustee notifies the Company, or the Holders of at least 25%
in principal amount of the then outstanding Securities of the series affected by
that Default (or, in the case of a Default under clause (4) of this Section
6.01, if outstanding Securities of other series are affected by that Default,
then at least 25% in principal amount of the then outstanding Securities so
affected) notify the Company and the Trustee, of the Default, and the Company
fails to cure the Default within 90 days after receipt of the notice. The notice
must specify the Default, demand that it be remedied and state that the notice
is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at the
time outstanding (other than an Event of Default specified in clause (5) or (6)
of Section 6.01 hereof) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by that default (or, in the case
of an Event of Default described in clause (4) of Section 6.01, if outstanding
Securities of other series are affected by that Default, then at least 25% in
principal amount of the then outstanding Securities so affected) by notice to
the Company and the Trustee, may declare the principal of (or, if any of those
Securities are Original Issue Discount Securities, that portion of the principal
amount as may be specified in the terms of that series) and all accrued and
unpaid interest on all then outstanding Securities of that series or of all
series, as the case may be, to be due and payable. Upon any such declaration,
the amounts due and payable on those Securities shall be due and payable
immediately. If an Event of Default specified in clause (5) or (6) of Section
6.01 hereof occurs, those amounts shall ipso facto become and be immediately due
and payable without any declaration, notice or other act on the part of the
Trustee or any Holder. The Holders of a majority in principal amount of the then
outstanding Securities of the series affected by that default or all series, as
the case may be, by written notice to the Trustee may rescind an acceleration
and its consequences (other than nonpayment of principal of or premium or
interest on or any Additional Amounts with respect to the Securities) if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default with respect to Securities of that series (or of all series,
as the case may be) have been cured or waived, except nonpayment of principal,
premium, interest or any Additional Amounts that has become due solely because
of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of, or premium, if any, or interest on the Securities of
that series or to enforce the performance of any provision of the Securities of
that series or this Indenture.
The Trustee may maintain a proceeding with respect to Securities of any
series even if it does not possess any of the Securities of that series or does
not produce any of them in the proceeding. A delay or omission by the Trustee or
any Holder in exercising any right or remedy
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accruing on an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in principal
amount of the then outstanding Securities of any series or of all series (acting
as one class) by notice to the Trustee may waive an existing or past Default or
Event of Default with respect to that series or all series, as the case may be,
and its consequences (including waivers obtained in connection with a tender
offer or exchange offer for Securities of that series or all series or a
solicitation of consents in respect of Securities of that series or all series,
provided that in each case that offer or solicitation is made to all Holders of
then outstanding Securities of that series or all series (but the terms of that
offer or solicitation may vary from series to series)), except (1) a continuing
Default or Event of Default in the payment of the principal of, or premium, if
any, or interest on or any Additional Amounts with respect to any Security or
(2) a continued Default in respect of a provision that under Section 9.02 cannot
be amended or supplemented without the consent of each Holder affected. Upon any
such waiver, that Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in
principal amount of the then outstanding Securities of that series may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with that direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking that action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series may
pursue a remedy with respect to this Indenture or the Securities of that series
only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to that series;
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(2) the Holders of at least 25% in principal amount of the then
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during that 60-day period, the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of and premium, if any, and
interest on and any Additional Amounts with respect to that Security, on or
after the respective due dates expressed in that Security, or to bring suit for
the enforcement of any such payment on or after those respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01
hereof occurs and is continuing with respect to Securities of any series, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company for the amount of principal, premium (if any),
interest and any Additional Amounts remaining unpaid on the Securities of that
series, and interest on overdue principal and premium, if any, and, to the
extent lawful, interest on overdue interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents and to take such actions, including participating as a member, voting
or otherwise, of any committee of creditors, as may be necessary or advisable to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceeding relative to the
Company or its creditors or properties and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any Bankruptcy Custodian in any such judicial
proceeding is hereby authorized by each Holder to make those payments to the
Trustee, and in the event that the Trustee shall consent to the making of those
payments directly to the Holders, to pay to the Trustee any amount due to it for
the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in that proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in
respect of which or for the benefit of which that money has been collected,
for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind, according to the
amounts due and payable on those Securities for principal, premium (if
any), interest and any Additional Amounts, respectively; and
Third: to the Company.
The Trustee, on prior written notice to the Company, may fix record dates
and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining a judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, premium (if any) or interest on or
Additional Amounts with respect to the Securities of any series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the New York Business
Day next preceding that on which final judgment is given. Neither the Company
nor the Trustee shall be liable for any shortfall nor shall it benefit from any
windfall in payments to Holders of Securities under this Section 6.10 caused by
a change in exchange rates between the time the amount of a judgment against it
is calculated as above and the time the Trustee converts the Judgment Currency
into the Required Currency to make payments under this Section to Holders of
Securities, but payment of that judgment shall discharge all amounts owed by the
Company on the claim or claims underlying that judgment.
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SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by a Holder or Holders of more than 10% in principal amount of
the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default with respect to the Securities of any
series has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture with respect to the
Securities of that series, and use the same degree of care and skill in
that exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any series:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, on certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine those
certificates and opinions to determine whether, on their face, they
appear to conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives
indemnity reasonably satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law. All money received by the Trustee with
respect to Securities of any series shall, until applied as herein
provided, be held in trust for the payment of the principal of, premium (if
any) and interest on and Additional Amounts with respect to the Securities
of that series.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
instruction, an Officers' Certificate or an Opinion of Counsel or both to
be provided. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on that instruction, Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel,
and the written advice of that counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers conferred on it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights and duties. However, the Trustee is subject to
Sections 7.10 and 7.11.
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SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities; it shall not be accountable for the Company's use
of the proceeds from the Securities or any money paid to the Company or upon the
Company's direction under any provision hereof; it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee; and it shall not be responsible for any statement or recital herein or
any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and it is known to the Trustee, the Trustee
shall mail to Holders of Securities of that series a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium (if any) and interest on
and Additional Amounts or any sinking fund installment with respect to the
Securities of that series, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Holders of Securities of that series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of this
Indenture, the Trustee shall mail to Holders of a series and the Company a brief
report dated as of that reporting date that complies with TIA Section 313(a);
provided, however, that if no event described in TIA Section 313(a) has occurred
within the twelve months preceding the reporting date with respect to a series,
no report need be transmitted to Holders of that series. The Trustee also shall
comply with TIA Section 313(b). The Trustee shall also transmit by mail all
reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a series of
Securities shall be filed by the Company with the SEC and each securities
exchange, if any, on which the Securities of that series are listed. The Company
shall notify the Trustee if and when any series of Securities is listed on any
stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee on
request for all reasonable disbursements, advances and expenses incurred by it.
Those expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend
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the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel, and the Company shall pay the reasonable fees and expenses of
that counsel. The Company need not pay for any settlement made without its
consent.
The Company shall not be obligated to reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or bad
faith.
To secure the payment obligations of the Company in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of,
premium (if any) and interest on and any Additional Amounts with respect to the
Securities of any series. That lien shall survive the satisfaction and discharge
of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only on the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to the
Securities of one or more series by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities of any series
may remove the Trustee with respect to the Securities of that series by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more series,
the Company shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of those series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series). Within one year after the
successor Trustee with respect to the Securities of any series takes office, the
Holders of a majority in principal amount of the Securities of that series may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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If a successor Trustee with respect to the Securities of any series does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of at least 10% in principal
amount of the then outstanding Securities of that series may petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of that series.
If the Trustee with respect to the Securities of a series fails to comply
with Section 7.10, any Holder of Securities of that series may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of that
series.
In case of the appointment of a successor Trustee with respect to all
Securities, each such successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
(but not all) series shall execute and deliver an indenture supplemental hereto
in which each successor Trustee shall accept that appointment and that (1) shall
confer to each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of that successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall confirm that all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee.
Nothing herein or in that supplemental indenture shall constitute those Trustees
co-trustees of the same trust, and each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee. Upon the execution and delivery of that
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, and each such successor Trustee
shall have all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
that successor Trustee relates. On the request of the Company or any successor
Trustee, that retiring Trustee shall transfer to that successor Trustee all
property held by that retiring Trustee as Trustee with respect to the Securities
of that or those series to which the appointment of that successor Trustee
relates.
Notwithstanding replacement of the Trustee or Trustees pursuant to this
Section 7.08, the obligations of the Company under Section 7.07 shall continue
for the benefit of the retiring Trustee or Trustees.
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SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee; provided, however, that in the case of a transfer of all
or substantially all of its corporate trust business to another corporation, the
transferee corporation expressly assumes all of the Trustee's liabilities
hereunder.
In case any Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to that authenticating Trustee may adopt that authentication and deliver the
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
those Securities either in the name of any predecessor hereunder or in the name
of the successor to the Trustee; and in all those cases those certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia and authorized under those laws to
exercise corporate trust power, shall be subject to supervision or examination
by Federal or State (or the District of Columbia) authority and shall have, or
be a Subsidiary of a bank or bank holding company having, a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition.
The Indenture shall always have a Trustee who satisfies the requirements of
TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and
shall comply with the provisions of TIA Section 310(b) during the period of time
required by this Indenture. Nothing in this Indenture shall prevent the Trustee
from filing with the SEC the application referred to in the penultimate
paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions of TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to the
Securities of a series (except as to any surviving rights of conversion or of
registration of transfer or exchange of Securities expressly provided for herein
and except that the Company's obligations under Section 7.07, the Trustee's and
Paying Agent's obligations under Section 8.03 and the rights, powers,
protections and privileges accorded the Trustee under Article VII shall
survive), and the
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Trustee, on demand of the Company, shall execute proper instruments
acknowledging the satisfaction and discharge of this Indenture with respect to
the Securities of that series, when:
(1) either
(A) all outstanding Securities of that series theretofore
authenticated and issued (other than destroyed, lost or stolen
Securities that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(B) all outstanding Securities of that series not theretofore
delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and, in the case of clause (i), (ii) or (iii) above, the Company has
irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i))
in trust for that purpose (x) cash in an amount, or (y) Government
Obligations, maturing as to principal and interest at such times and
in such amounts as will ensure the availability of cash in an amount
or (z) a combination thereof, which will be sufficient, in the opinion
(in the case of clauses (y) and (z)) of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the entire
indebtedness on the Securities of that series for principal and any
interest and any Additional Amounts to the date of that deposit (in
the case of Securities which have become due and payable) or for
principal, premium, if any, interest and any Additional Amounts to the
Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
2.01, to be applicable to the Securities of that series;
(2) the Company has paid or caused to be paid all other sums payable
by it hereunder with respect to the Securities of that series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of that series have been complied
with, together with an Opinion of Counsel to the same effect.
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(b) Unless this Section 8.01(b) is specified as not being applicable to
Securities of a series as contemplated by Section 2.01, the Company may
terminate certain of its obligations under this Indenture ("covenant
defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of that
series, (i) money in the currency in which payment of the Securities of
that series is to be made in an amount, or (ii) Government Obligations with
respect to that series, maturing as to principal and interest at such times
and in such amounts as will ensure the availability of money in the
currency in which payment of the Securities of that series is to be made in
an amount or (iii) a combination thereof, that is sufficient, in the
opinion (in the case of clauses (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay, without consideration of the
reinvestment of any such amounts and after payment of all taxes or other
charges or assessments in respect thereof payable by the Trustee, the
principal of and premium (if any) and interest on and any Additional
Amounts with respect to all Securities of that series on each date that
such principal, premium (if any), interest or Additional Amounts are due
and payable and (at the Stated Maturity thereof or on redemption as
provided in Section 8.01(e)) to pay all other sums payable by it hereunder;
provided that the Trustee shall have been irrevocably instructed to apply
that money and/or the proceeds of those Government Obligations to the
payment of said principal, premium (if any), interest and Additional
Amounts with respect to the Securities of that series as the same shall
become due;
(2) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of that series have been complied
with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of
that series shall have occurred and be continuing on the date of that
deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel from counsel reasonably acceptable to the Trustee or a tax ruling
to the effect that the Holders of Securities of that series will not
recognize income, gain or loss for Federal income tax purposes as a result
of the Company's exercise of its option under this Section 8.01(b) and will
be subject to Federal income tax on the same amount and in the same manner
and at the same times as would have been the case if that option had not
been exercised;
(5) the Company has complied with any additional conditions specified
pursuant to Section 2.01 to be applicable to the discharge of Securities of
that series pursuant to this Section 8.01; and
(6) that deposit and discharge shall not cause the Trustee to have a
conflicting interest as defined in TIA Section 310(b).
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In that event, this Indenture shall cease to be of further effect (except
as set forth in this paragraph), and the Trustee, on demand of the Company,
shall execute proper instruments acknowledging satisfaction and discharge under
this Indenture. However, the Company's obligations in Sections 2.05, 2.06, 2.07,
2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the Trustee's and Paying
Agent's obligations in Section 8.03 and the rights, powers, protections and
privileges accorded the Trustee under Article VII shall survive until all
Securities of that series are no longer outstanding. Thereafter, only the
Company's obligations in Section 7.07 and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive with respect to Securities of that
series.
After making the irrevocable deposit pursuant to this Section 8.01(b) and
following satisfaction of the other conditions set forth herein, the Trustee on
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture with respect to the Securities of that series, except for
those surviving obligations specified above.
In order to have money available on a payment date to pay principal of or
premium (if any) or interest on or any Additional Amounts with respect to the
Securities, the Government Obligations shall be payable as to principal or
interest on or before that payment date in such amounts as will provide the
necessary money. Any such Government Obligations shall not be callable at the
issuer's option.
(c) If the Company has previously complied or is concurrently complying
with Section 8.01(b) (other than any additional conditions specified pursuant to
Section 2.01 that are expressly applicable only to covenant defeasance) with
respect to Securities of a series, then, unless this Section 8.01(c) is
specified as not being applicable to Securities of that series as contemplated
by Section 2.01, the Company may elect to be discharged ("legal defeasance")
from its obligations to make payments with respect to Securities of that series,
if:
(1) no Default or Event of Default under clauses (5) and (6) of
Section 6.01 hereof shall have occurred at any time during the period
ending on the 91st day after the date of deposit contemplated by Section
8.01(b) (it being understood that this condition shall not be deemed
satisfied until the expiration of that period);
(2) unless otherwise specified with respect to Securities of that
series as contemplated by Section 2.01, the Company has delivered to the
Trustee an Opinion of Counsel from counsel reasonably acceptable to the
Trustee to the effect referred to in Section 8.01(b)(4) with respect to
that legal defeasance, which opinion is based on (i) a private ruling of
the Internal Revenue Service addressed to the Company, (ii) a published
ruling of the Internal Revenue Service or (iii) a change in the applicable
federal income tax law (including regulations) after the date of this
Indenture;
(3) the Company has complied with any other conditions specified
pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of that series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request
requesting legal defeasance of the Securities of that series and an
Officers' Certificate stating that
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all conditions precedent with respect to legal defeasance of the Securities
of that series have been complied with, together with an Opinion of Counsel
to the same effect.
In that event, the Company will be discharged from its obligations under
this Indenture and the Securities of that series to pay principal of, premium
(if any) and interest on, and any Additional Amounts with respect to, Securities
of that series, the Company's obligations under Sections 4.01, 4.02 and 5.01
shall terminate with respect to those Securities, and the entire indebtedness of
the Company evidenced by those Securities shall be deemed paid and discharged.
(d) If and to the extent additional or alternative means of satisfaction,
discharge or defeasance of Securities of a series are specified to be applicable
to that series as contemplated by Section 2.01, the Company may terminate any or
all of its obligations under this Indenture with respect to Securities of a
series and any or all of its obligations under the Securities of that series if
it fulfills such other means of satisfaction and discharge as may be so
specified, as contemplated by Section 2.01, to be applicable to the Securities
of that series.
(e) If Securities of any series subject to subsections (a), (b), (c) or (d)
of this Section 8.01 are to be redeemed prior to their Stated Maturity, whether
pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the terms of the applicable trust
arrangement shall provide for that redemption, and the Company shall make such
arrangements as are reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee reasonably satisfactory to the Trustee and the
Company shall hold in trust money or Government Obligations deposited with it
pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company at any
time on the written request of the Company any excess money or Government
Obligations (or proceeds therefrom) held by them.
Subject to the requirements of any applicable abandoned property laws, the
Trustee and the Paying Agent shall pay to the Company on written request any
money held by them for the payment of principal, premium (if any), interest or
any Additional Amounts that remain unclaimed for two years after the date on
which that payment shall have become due. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and the Paying Agent with respect to that money shall
cease.
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SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or
Government Obligations deposited with respect to Securities of any series in
accordance with Section 8.01 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting that application, the obligations of the
Company under this Indenture with respect to the Securities of that series and
under the Securities of that series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee or
the Paying Agent is permitted to apply all such money or Government Obligations
in accordance with Section 8.01; provided, however, that if the Company has made
any payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
those Securities to receive such payment from the money or Government
Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities or waive any provision hereof or thereof without the consent of any
Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to provide for the issuance of bearer
Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add
guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if those covenants are to
be for the benefit of less than all series of Securities, stating that
those covenants are expressly being included solely for the benefit of that
series), or to surrender any right or power herein conferred on the
Company;
(7) to add any additional Events of Default with respect to all or any
series of the Securities (and, if any such Event of Default is applicable
to less than all series of Securities, specifying the series to which that
Event of Default is applicable);
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(8) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no outstanding Security of any series created prior to the
execution of that amendment or supplemental indenture that is adversely
affected in any material respect by that change in or elimination of that
provision;
(9) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 8.01; provided,
however, that any such action shall not adversely affect the interest of
the Holders of Securities of that series or any other series of Securities
in any material respect; or
(11) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 7.08.
Upon the request of the Company, accompanied by a Board Resolution, and
upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall, subject to Section 9.06, join with the Company in the execution
of any supplemental indenture authorized or permitted by the terms of this
Indenture and make any further appropriate agreements and stipulations that may
be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture with the written consent (including
consents obtained in connection with a tender offer or exchange offer for
Securities of any one or more series or all series or a solicitation of consents
in respect of Securities of any one or more series or all series, provided that
in each case that offer or solicitation is made to all Holders of then
outstanding Securities of each such series (but the terms of that offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by that amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution, and
upon the filing with the Trustee of evidence of the consent of the Holders as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06, the Trustee shall, subject to Section 9.06, join with the Company in the
execution of that amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if that consent approves the substance
thereof.
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The Holders of a majority in principal amount of the then outstanding
Securities of one or more series or of all series may waive compliance in a
particular instance by the Company with any provision of this Indenture with
respect to Securities of that series (including waivers obtained in connection
with a tender offer or exchange offer for Securities of that series or a
solicitation of consents in respect of Securities of that series, provided that
in each case that offer or solicitation is made to all Holders of then
outstanding Securities of that series (but the terms of that offer or
solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of, premium on or any mandatory sinking fund
payment with respect to, or change the Stated Maturity of, any Security or
reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable on a declaration of acceleration of the
Maturity thereof pursuant to Section 6.02;
(4) reduce the premium, if any, payable on the redemption of any
Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts
with respect to any Security;
(6) change the coin or currency or currencies (including composite
currencies) in which any Security or any premium, interest or Additional
Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of this
Indenture pursuant to Section 6.04 or 6.07 or make any change in this
sentence of Section 9.02; or
(9) waive a continuing Default or Event of Default in the payment of
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of that series with respect to that covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from that Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which that consent is required or sought as of a date
identified by the Company in a notice furnished to Holders in accordance with
the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of each Security affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail that notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities shall
comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his or her Security or portion of a Security if the Trustee receives
written notice of revocation before the date the amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date (which
need not comply with Section 316(c) of the TIA) for the purpose of determining
the Holders entitled to consent to any amendment, supplement or waiver or to
take any other action under this Indenture. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at that record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to that amendment,
supplement or waiver or to revoke any consent previously given, whether or not
those Persons continue to be Holders after that record date. No consent shall be
valid or effective for more than 90 days after that record date unless consents
from Holders of the principal amount of Securities required hereunder for that
amendment or waiver to be effective shall have also been given and not revoked
within that 90-day period.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it is of the type described in any of clauses (1) through
(9) of Section 9.02 hereof. In that case, the amendment, supplement or waiver
shall bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder's Security.
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SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding Security,
the Company may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security at the request of
the Company regarding the changed terms and return it to the Holder.
Alternatively, if the Company so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of that amendment or supplement.
Securities of any series authenticated and delivered after the execution of
any amendment or supplement may, and shall if required by the Company, bear a
notation in form approved by the Company as to any matter provided for in that
amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant to
this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign that
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying on, an Opinion of
Counsel provided at the expense of the Company as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding on the Company
in accordance with its terms.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by operation of TIA Section 318(c), the imposed duties shall
control.
SECTION 10.02 Notices.
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail
(registered or certified, return receipt requested), telex, facsimile or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
McDermott International, Inc.
1450 Poydras Street
New Orleans, Louisiana 70112-6050
Attention: General Counsel
If to the Trustee:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
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The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if by facsimile; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it,
except in the case of notice to the Trustee, it is duly given only when
received.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to the
Trustee or the Company by Holders, shall be in writing, except as otherwise set
forth herein.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice required by this
Indenture, then such method of notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of that notice.
SECTION 10.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of the signers, all
conditions precedent and
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covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05 hereof) stating that, in the opinion of that
counsel, all those conditions precedent and covenants have been complied
with.
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(1) a statement that the Person making that certificate or opinion has
read that covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation on which the statements or opinions contained in that
certificate or opinion are based;
(3) a statement that, in the opinion of that Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not that covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of that Person,
that condition or covenant has been complied with.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 10.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the
Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of those obligations or their creation. Each Holder by
accepting a Security waives and releases all that liability. The waiver and
release shall be part of the consideration for the issue of Securities.
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SECTION 10.09 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PRINCIPLES OF CONFLICTS OF LAWS THEREUNDER TO THE EXTENT THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.11 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 10.12 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the fullest extent permitted by applicable
law, not in any way be affected or impaired thereby.
SECTION 10.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 10.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
MCDERMOTT INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
-----------------------------------------
as Trustee
By:
-------------------------------------
Name:
Title:
49
EX-4.5
6
h90172ex4-5.txt
FORM OF INDENTURE-RE: SUBORDINATED DEBT SECURITIES
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EXHIBIT 4.5
FORM OF SUBORDINATED INDENTURE
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MCDERMOTT INTERNATIONAL, INC.
as Issuer
and
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as Trustee
----------
Indenture
Dated as of ,
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Subordinated Debt Securities
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MCDERMOTT INTERNATIONAL, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF
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Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
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Section 310 (a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10
(a)(3)..................................................... Not Applicable
(a)(4)..................................................... Not Applicable
(a)(5)..................................................... 7.10
(b)........................................................ 7.08, 7.10
Section 311 (a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ Not Applicable
Section 312 (a)........................................................ 2.07
(b)........................................................ 11.03
(c)........................................................ 11.03
Section 313 (a)........................................................ 7.06
(b)........................................................ 7.06
(c)........................................................ 7.06
(d)........................................................ 7.06
Section 314 (a)........................................................ 4.03, 4.04
(b)........................................................ Not Applicable
(c)(1)..................................................... 11.04
(c)(2)..................................................... 11.04
(c)(3)..................................................... Not Applicable
(d)........................................................ Not Applicable
(e)........................................................ 11.05
Section 315 (a)........................................................ 7.01(b)
(b)........................................................ 7.05
(c)........................................................ 7.01(a)
(d)........................................................ 7.01(c)
(d)(1)..................................................... 7.01(c)(1)
(d)(2)..................................................... 7.01(c)(2)
(d)(3)..................................................... 7.01(c)(3)
(e)........................................................ 6.11
Section 316 (a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... Not Applicable
(a)(last sentence)......................................... 2.11
(b)........................................................ 6.07
Section 317 (a)(1)..................................................... 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.06
Section 318 (a)........................................................ 11.01
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................................................1
SECTION 1.01 Definitions.................................................................................1
SECTION 1.02 Other Definitions...........................................................................6
SECTION 1.03 Incorporation by Reference of Trust Indenture Act...........................................7
SECTION 1.04 Rules of Construction.......................................................................7
ARTICLE II THE SECURITIES..............................................................................8
SECTION 2.01 Amount Unlimited; Issuable in Series........................................................8
SECTION 2.02 Denominations..............................................................................11
SECTION 2.03 Forms Generally............................................................................11
SECTION 2.04 Execution, Authentication, Delivery and Dating.............................................11
SECTION 2.05 Registrar and Paying Agent.................................................................13
SECTION 2.06 Paying Agent to Hold Money in Trust........................................................14
SECTION 2.07 Holder Lists...............................................................................14
SECTION 2.08 Transfer and Exchange......................................................................14
SECTION 2.09 Replacement Securities.....................................................................15
SECTION 2.10 Outstanding Securities.....................................................................15
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities..............15
SECTION 2.12 Temporary Securities.......................................................................16
SECTION 2.13 Cancellation...............................................................................16
SECTION 2.14 Payments; Defaulted Interest...............................................................16
SECTION 2.15 Persons Deemed Owners......................................................................17
SECTION 2.16 Computation of Interest....................................................................17
SECTION 2.17 Global Securities; Book-Entry Provisions...................................................17
ARTICLE III REDEMPTION.................................................................................19
SECTION 3.01 Applicability of Article...................................................................19
SECTION 3.02 Notice to the Trustee......................................................................19
SECTION 3.03 Selection of Securities To Be Redeemed.....................................................20
SECTION 3.04 Notice of Redemption.......................................................................20
SECTION 3.05 Effect of Notice of Redemption.............................................................21
SECTION 3.06 Deposit of Redemption Price................................................................21
SECTION 3.07 Securities Redeemed or Purchased in Part...................................................22
SECTION 3.08 Purchase of Securities.....................................................................22
SECTION 3.09 Mandatory and Optional Sinking Funds.......................................................22
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities......................................22
SECTION 3.11 Redemption of Securities for Sinking Fund..................................................22
ARTICLE IV COVENANTS..................................................................................23
SECTION 4.01 Payment of Securities......................................................................23
SECTION 4.02 Maintenance of Office or Agency............................................................24
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SECTION 4.03 SEC Reports; Financial Statements..........................................................24
SECTION 4.04 Compliance Certificate.....................................................................24
SECTION 4.05 Existence..................................................................................25
SECTION 4.06 Waiver of Stay, Extension or Usury Laws....................................................25
SECTION 4.07 Additional Amounts.........................................................................25
ARTICLE V SUCCESSORS.................................................................................26
SECTION 5.01 Limitations on Mergers, Consolidations and Other Transactions..............................26
SECTION 5.02 Successor Person Substituted...............................................................27
ARTICLE VI DEFAULTS AND REMEDIES......................................................................27
SECTION 6.01 Events of Default..........................................................................27
SECTION 6.02 Acceleration...............................................................................29
SECTION 6.03 Other Remedies.............................................................................29
SECTION 6.04 Waiver of Defaults.........................................................................30
SECTION 6.05 Control by Majority........................................................................30
SECTION 6.06 Limitations on Suits.......................................................................30
SECTION 6.07 Rights of Holders to Receive Payment.......................................................31
SECTION 6.08 Collection Suit by Trustee.................................................................31
SECTION 6.09 Trustee May File Proofs of Claim...........................................................31
SECTION 6.10 Priorities.................................................................................32
SECTION 6.11 Undertaking for Costs......................................................................33
ARTICLE VII TRUSTEE....................................................................................33
SECTION 7.01 Duties of Trustee..........................................................................33
SECTION 7.02 Rights of Trustee..........................................................................34
SECTION 7.03 May Hold Securities........................................................................34
SECTION 7.04 Trustee's Disclaimer.......................................................................35
SECTION 7.05 Notice of Defaults.........................................................................35
SECTION 7.06 Reports by Trustee to Holders..............................................................35
SECTION 7.07 Compensation and Indemnity.................................................................35
SECTION 7.08 Replacement of Trustee.....................................................................36
SECTION 7.09 Successor Trustee by Merger, etc...........................................................38
SECTION 7.10 Eligibility; Disqualification..............................................................38
SECTION 7.11 Preferential Collection of Claims Against Company..........................................38
ARTICLE VIII DISCHARGE OF INDENTURE.....................................................................38
SECTION 8.01 Termination of Company's Obligations.......................................................38
SECTION 8.02 Application of Trust Money.................................................................42
SECTION 8.03 Repayment to Company.......................................................................42
SECTION 8.04 Reinstatement..............................................................................43
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS.....................................................43
SECTION 9.01 Without Consent of Holders.................................................................43
SECTION 9.02 With Consent of Holders....................................................................44
SECTION 9.03 Compliance with Trust Indenture Act........................................................46
SECTION 9.04 Revocation and Effect of Consents..........................................................46
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SECTION 9.05 Notation on or Exchange of Securities......................................................47
SECTION 9.06 Trustee to Sign Amendments, etc. ..........................................................47
ARTICLE X SUBORDINATION..............................................................................47
SECTION 10.01 Securities Subordinated to Senior Indebtedness.............................................47
SECTION 10.02 No Payment on Securities in Certain Circumstances..........................................48
SECTION 10.03 Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization...........................................................49
SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness....................................50
SECTION 10.05 Obligations of the Company Unconditional...................................................51
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice....................51
SECTION 10.07 Application by Trustee of Amounts Deposited with It........................................51
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of
Senior Indebtedness.....................................................................52
SECTION 10.09 Trustee to Effectuate Subordination of Securities..........................................52
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness...............................................53
SECTION 10.11 Article X Not to Prevent Events of Default.................................................53
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.............................53
SECTION 10.13 Article Applicable to Paying Agent.........................................................53
ARTICLE XI MISCELLANEOUS..............................................................................54
SECTION 11.01 Trust Indenture Act Controls...............................................................54
SECTION 11.02 Notices....................................................................................54
SECTION 11.03 Communication by Holders with Other Holders................................................55
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.........................................55
SECTION 11.05 Statements Required in Certificate or Opinion..............................................55
SECTION 11.06 Rules by Trustee and Agents................................................................56
SECTION 11.07 Legal Holidays.............................................................................56
SECTION 11.08 No Recourse Against Others.................................................................56
SECTION 11.09 Governing Law..............................................................................56
SECTION 11.10 No Adverse Interpretation of Other Agreements..............................................56
SECTION 11.11 Successors.................................................................................56
SECTION 11.12 Severability...............................................................................56
SECTION 11.13 Counterpart Originals......................................................................57
SECTION 11.14 Table of Contents, Headings, etc. .........................................................57
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INDENTURE dated as of _______________ between McDermott International,
Inc., a corporation organized under the laws of the Republic of Panama (the
"Company"), and ____________________, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's unsecured
subordinated debentures, notes or other evidences of indebtedness (the
"Securities") to be issued from time to time in one or more series as provided
in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the
express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the Company
with respect to certain taxes, assessments or other governmental charges imposed
on certain Holders and that are owing to those Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, that specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of that
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing."Agent" means any
Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized, with respect to any particular matter, to act
by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of that
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease Obligation" of any Person means any obligation of
that Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be
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capitalized for financial reporting purposes in accordance with GAAP; and the
amount of that obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean that successor corporation; provided, however, that for
purposes of any provision contained herein which is required by the TIA,
"Company" shall also mean each other obligor (if any) on the Securities of a
series.
"Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers of the
Company, and delivered to the Trustee.
"Corporate Trust Office" of the Trustee means the office of the Trustee
located at ____________________, and as may be located at such other address as
the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified
pursuant to Section 2.01 hereof as the initial Depositary with respect to the
Securities of that series, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include that successor.
"Designated Senior Indebtedness," unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means any
Senior Indebtedness of the Company that (i) in the instrument evidencing the
same or the assumption or guarantee thereof (or related documents to which the
Company is a party) is expressly designated as "Designated Senior Indebtedness"
for purposes of this Indenture and (ii) satisfies such other conditions as may
be provided with respect to the Securities of that series; provided that those
instruments or documents may place limitations and conditions on the right of
that Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness.
"Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (i) except as set forth in (ii), with respect to any
Person, Capital Stock of that Person that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or on
the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by that
Person or any Subsidiary of that Person, in whole or in part, on or prior to the
last Stated Maturity of the Securities of that series, and (ii) with respect to
any Subsidiary of that Person (including with respect to any Subsidiary of the
Company), any Capital Stock other than any common stock with no preference,
privileges, or redemption or repayment provisions.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Security" of any series means a Security of that Series that is
issued in global form in the name of the Depositary with respect thereto or its
nominee.
"Government Obligations" means, with respect to a series of Securities,
direct obligations of the government that issues the currency in which the
Securities of the series are payable for the payment of which the full faith and
credit of that government is pledged, or obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of that government, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by that government.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of that Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of that Person or only to a portion
thereof), (ii) all obligations of that Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of that Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit, bid or
performance bonds and other similar obligations issued by or for the account of
that Person in the ordinary course of business, to the extent not drawn or, to
the extent drawn, if that drawing is reimbursed not later than 30 Business Days
following demand for reimbursement, (iv) all obligations of that Person to pay
the deferred and unpaid purchase price of property or services, except trade
payables, advances on contracts and accrued expenses arising in the ordinary
course of business, (v) all Capitalized Lease Obligations of that Person, (vi)
all Indebtedness of others secured by a Lien on any asset of that Person,
whether or not that Indebtedness is assumed by that Person (provided that if the
obligations so secured have not been assumed in full by that Person or are not
otherwise that Person's legal liability in full, then those obligations shall be
deemed to be in an amount equal to the greater of (a) the lesser of (1) the full
amount of those obligations and (2) the fair market value of those assets, as
determined in good faith by the board of directors or other managing body of
that Person and (b) the amount of obligations as have been assumed by that
Person or which are otherwise that Person's legal liability), and (vii) all
guarantees by that Person of or with respect to Indebtedness of others (other
than endorsements in the ordinary course of business), in each case to the
extent of the Indebtedness guaranteed.
"Indenture" means this Indenture as amended or supplemented from time
to time pursuant to the provisions hereof, and includes the terms of a
particular series of Securities established as contemplated by Section 2.01.
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"interest" means, with respect to an Original Issue Discount Security
that by its terms bears interest only after Maturity, interest payable after
Maturity.
"Interest Payment Date," when used with respect to any Security, shall
have the meaning assigned to that term in the Security as contemplated by
Section 2.01.
"Issue Date" means, with respect to Securities of a series, the date on
which the Securities of that series are originally issued under this Indenture.
"Junior security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of that Person or any
Indebtedness of that Person that is subordinated in right of payment to Senior
Indebtedness of the Company to substantially the same extent as, or to a greater
extent than, the Securities of that series and has no scheduled installment of
principal due, by redemption, sinking fund payment or otherwise, on or prior to
the last Stated Maturity of the Securities of that series.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York, _______________, New
Orleans, Louisiana or a Place of Payment are authorized or obligated by law,
regulation or executive order to remain closed.
"Maturity" means, with respect to any Security, the date on which the
principal of that Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity thereof,
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of a
Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. That counsel may be an employee of or
counsel to the Company or the Trustee.
"Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable on a
declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where, subject to the provisions of Section 4.02, the
principal of, premium (if any) on
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and interest on the Securities of that series are payable as specified in
accordance with Section 2.01.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Redemption Date" means, with respect to any Security to be redeemed,
the date fixed for that redemption by or pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture.
"Rule 144A Securities" means Securities of a series designated pursuant
to Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Custodian" means, with respect to Securities of a series
issued in global form, the Trustee for Securities of that series, as custodian
with respect to the Securities of that series, or any successor entity thereto.
"Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means (i)
the principal of and premium, if any, and interest on (including interest
accruing or becoming owing prior to or subsequent to the commencement of any
proceeding against or with respect to the Company under any bankruptcy law) and
other amounts due on or in connection with any Indebtedness of the Company,
whether currently outstanding or hereafter incurred, issued or assumed, unless,
by the terms of the instrument creating or evidencing that Indebtedness, it is
provided that such Indebtedness is not superior in right of payment to the
Securities or to other Indebtedness which is pari passu with or subordinated to
the Securities, and (ii) any modifications, refunding, deferrals, renewals or
extensions of any such Indebtedness or securities, notes or other evidences of
Indebtedness issued in exchange for that Indebtedness; provided that in no event
shall "Senior Indebtedness" of the Company include Indebtedness of the Company
for borrowed money owed or owing to any Subsidiary of the Company or any
executive officer or director of the Company.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in that
Security as the fixed date on which the principal of that Security or that
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries,
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or by the Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock that ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has that voting power by reason of any contingency.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter "Trustee" means each Person who is then a Trustee hereunder, and if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series means the Trustee with respect to Securities of
that series.
"United States" means the United States of America (including the
States and the District of Columbia) and its territories and possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands).
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" means Government Obligations with respect
to Securities payable in Dollars.
SECTION 1.02 Other Definitions.
DEFINED
DEFINED TERM IN SECTION
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"Bankruptcy Custodian".......................................... 6.01
"Conversion Event".............................................. 6.01
"covenant defeasance"........................................... 8.01
"Event of Default".............................................. 6.01
"Exchange Rate"................................................. 2.11
"Judgment Currency"............................................. 6.10
"legal defeasance".............................................. 8.01
"mandatory sinking fund payment"................................ 3.09
"optional sinking fund payment"................................. 3.09
"Paying Agent".................................................. 2.05
"Payment Default"............................................... 10.02
"Payment Blocking Notice"....................................... 10.02
"Registrar"..................................................... 2.05
"Required Currency"............................................. 6.10
"Successor"..................................................... 5.01
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SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this instrument to Articles and Sections are
references to the corresponding Articles and Sections in and of this
instrument.
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ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth, or determined
in a manner provided, in an Officers' Certificate or in a Company Order, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from the Securities of all other series);
(2) if there is to be a limit, the limit on the aggregate principal
amount of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered on registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12,
2.17, 3.07 or 9.05 and except for any Securities that, pursuant to Section
2.04 or 2.17, are deemed never to have been authenticated and delivered
hereunder); provided, however, that unless otherwise provided in the terms
of the series, the authorized aggregate principal amount of that series may
be increased before or after the issuance of any Securities of the series
by a Board Resolution (or action pursuant to a Board Resolution) to that
effect;
(3) whether any Securities of the series are to be issuable initially
in temporary global form and whether any Securities of the series are to be
issuable in permanent global form, as Global Securities or otherwise, and,
if so, whether beneficial owners of interests in any such Global Security
may exchange those interests for Securities of that series and of like
tenor of any authorized form and denomination and the circumstances under
which those exchanges may occur, if other than in the manner provided in
Section 2.17, and the initial Depositary and Security Custodian, if any,
for any Global Security or Securities of that series;
(4) (i) if other than provided herein, the Person to whom any interest
on Securities of the series shall be payable, and (ii) the manner in which
any interest payable on a temporary Global Security on any Interest Payment
Date will be paid if other than in the manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to those
Securities shall be payable, the date or dates from which that interest
shall accrue, the Interest Payment Dates on which that interest
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shall be payable and the record date for the interest payable on any
Securities on any Interest Payment Date;
(7) the place or places where, subject to the provisions of Section
4.02, the principal of, premium (if any) and interest on and any Additional
Amounts with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions on which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company may exercise any such option,
if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions on which Securities of
the series shall be redeemed, purchased or repaid in whole or in part
pursuant to that obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which any Securities of that series shall be
issuable;
(11) if other than Dollars, the currency or currencies (including
composite currencies) or the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or
property of the Company or any other Person, in which payment of the
principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies (including composite currencies) other than that in which the
Securities are stated to be payable, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to Securities of that
series as to which that election is made shall be payable, and the periods
within which and the terms and conditions on which that election is to be
made;
(13) if the amount of payments of principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series may be determined with reference to any commodities, currencies or
indices, values, rates or prices or any other index or formula, the manner
in which those amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable on
declaration of acceleration of the Maturity thereof pursuant to Section
6.02;
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(15) any additional means of satisfaction and discharge of this
Indenture and any additional conditions or limitations to discharge with
respect to Securities of the series pursuant to Article VIII or any
modifications of or deletions from those conditions or limitations;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.01 or covenants of the Company set forth in
Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer
or exchange of Securities of the series, which may amend, supplement,
modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or
exchangeable for Capital Stock, other debt securities (including
Securities), warrants, other equity securities or any other securities or
property of the Company or any other Person, at the option of the Company
or the Holder or on the occurrence of any condition or event, the terms and
conditions for that conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit
of Section 4.03(b) (and accordingly constitute Rule 144A Securities);
(20) any modifications to, or qualifications contemplated by, the
definition of "Designated Senior Indebtedness," any modifications to the
definition of "Senior Indebtedness" of the Company or any modifications to
Article X or the other provisions regarding subordination with respect to
the Securities of that series; and
(21) any other terms of the series (which terms shall not be
prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 2.03) set
forth, or determined in the manner provided, in the Officers' Certificate or
Company Order referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of that action
together with that Board Resolution shall be set forth in an Officers'
Certificate or certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate or Company Order setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article X.
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SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 2.01. In the absence of any
such provisions with respect to the Securities of any series, the Securities of
that series denominated in Dollars shall be issuable in denominations of $1,000
and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in
substantially the form or forms (including temporary or permanent global form)
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto. The Securities may have notations, legends or endorsements
required by law, securities exchange rule, the Company's certificate of
incorporation, bylaws or other similar governing documents, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). A copy of the
Board Resolution establishing the form or forms of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of those
Securities.
The definitive Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the Officers executing those Securities, as
evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
-------------------------
By:
-------------------------------------
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities of each series
on behalf of the Company by manual or facsimile signature. The Company's seal,
if any, shall be impressed, affixed, imprinted or reproduced on the Securities
and may be in facsimile form.
If an Officer of the Company whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized signatory of the Trustee, which signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been
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authenticated and delivered hereunder but never issued and sold by the Company,
and the Company delivers that Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement (which need not
comply with Section 11.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture that Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall authenticate
and deliver those Securities for original issue on a Company Order for the
authentication and delivery of those Securities or pursuant to such procedures
reasonably acceptable to the Trustee as may be specified from time to time by
Company Order. That order shall specify the amount of the Securities to be
authenticated, the date on which the original issue of Securities is to be
authenticated, the name or names of the initial Holder or Holders and any other
terms of the Securities of that series not otherwise determined. If provided for
in those procedures, that Company Order may authorize (1) authentication and
delivery of Securities of that series for original issue from time to time, with
certain terms (including, without limitation, the Maturity date or dates,
original issue date or dates and interest rate or rates) that differ from
Security to Security and (2) may authorize authentication and delivery pursuant
to oral or electronic instructions from the Company or its duly authorized
agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating those Securities, and accepting the additional
responsibilities under this Indenture in relation to those Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 11.04), and (subject to
Section 7.01) shall be fully protected in relying on,
(a) an Officers' Certificate setting forth the Board Resolution and,
if applicable, an appropriate record of any action taken pursuant thereto,
as contemplated by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of those Securities has been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such form has been established in conformity with the provisions of
this Indenture;
(ii) if the terms of those Securities have been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(iii) those Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in that Opinion of Counsel, will constitute valid
and binding obligations of the
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Company, enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws in effect from time to
time affecting the rights of creditors generally, and the application
of general principles of equity (regardless of whether that
enforceability is considered in a proceeding in equity or at law).
If all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate and Opinion of
Counsel at the time of issuance of each such Security, but that Officers'
Certificate and Opinion of Counsel shall be delivered at or before the time of
issuance of the first Security of the series to be issued.
The Trustee shall not be required to authenticate those Securities if
the issuance of those Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of that
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by that agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of
Securities where Securities of that series may be presented for registration of
transfer or exchange ("Registrar") and an office or agency where Securities of
that series may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities of that series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar, and
the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to that Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
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SECTION 2.06 Paying Agent to Hold Money in Trust.
With respect to each series of Securities, the Company shall require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent will hold in trust for the benefit of Holders of Securities of that series
or the Trustee all money held by the Paying Agent for the payment of principal
of, premium, if any, or interest on or any Additional Amounts with respect to
Securities of that series and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed. Upon payment over to the Trustee and upon accounting for any
funds disbursed, the Paying Agent (if other than the Company or a Subsidiary of
the Company) shall have no further liability for the money. If the Company or a
Subsidiary of the Company acts as Paying Agent with respect to a series of
Securities, it shall segregate and hold in a separate trust fund for the benefit
of the Holders of Securities of that series all money held by it as Paying
Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of each series of Securities and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar with respect to a series of
Securities, the Company shall furnish to the Trustee at least five Business Days
before each Interest Payment Date with respect to that series of Securities, and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Securities of that series, and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to
Section 2.01, when Securities of any series are presented to the Registrar with
the request to register the transfer of those Securities or to exchange those
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements and the
requirements of this Indenture for those transactions are met; provided,
however, that the Securities presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form reasonably satisfactory to the Registrar duly
executed by the Holder thereof or by his attorney, duly authorized in writing,
on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's written
request and submission of the Securities (other than Global Securities). No
service charge shall be made to a Holder for any registration of transfer or
exchange (except as otherwise expressly permitted herein), but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than such transfer
tax or similar
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governmental charge payable on exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in accordance with the
provisions of Section 2.04. Notwithstanding any other provisions of this
Indenture to the contrary, the Company shall not be required to register the
transfer or exchange of (a) any Security selected for redemption in whole or in
part pursuant to Article III, except the unredeemed portion of any Security
being redeemed in part or (b) any Security during the period beginning 15
Business Days before the mailing of notice of any offer to repurchase Securities
of the series required pursuant to the terms thereof or of redemption of
Securities of a series to be redeemed and ending at the close of business on the
date of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been destroyed, lost or stolen
and the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of that Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay that Security. If
required by the Trustee or the Company, the Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury
Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal
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amount of an Original Issue Discount Security shall be the principal amount
thereof that would be due and payable as of the date of that determination upon
acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal
amount of a Security denominated in a foreign currency shall be the Dollar
equivalent, as determined by the Company by reference to the noon buying rate in
The City of New York for cable transfers for that currency, as that rate is
certified for customs purposes by the Federal Reserve Bank of New York (the
"Exchange Rate") on the date of original issuance of that Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
Dollar equivalent, as determined by the Company by reference to the Exchange
Rate on the date of original issuance of that Security, of the amount determined
as provided in (a) above), of that Security and (c) Securities owned by the
Company or any other obligor on the Securities or any Affiliate of the Company
or of that other obligor shall be disregarded, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Securities that the
Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment or redemption or for credit against any sinking fund payment. The
Trustee shall cancel all Securities surrendered for registration of transfer,
exchange, payment, redemption, replacement or cancellation or for credit against
any sinking fund. Unless the Company shall direct in writing that canceled
Securities be returned to it, after written notice to the Company all canceled
Securities held by the Trustee shall be disposed of in accordance with the usual
disposal procedures of the Trustee, and the Trustee shall maintain a record of
their disposal. The Company may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
Unless otherwise provided as contemplated by Section 2.01 with respect
to the Securities of any series, interest (except defaulted interest) on any
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Persons who are registered Holders of
that Security at the close of business on the record date next preceding that
Interest Payment Date, even if those Securities are canceled after that record
date and on or before that Interest Payment Date. Unless otherwise provided with
respect to the Securities of any series, the Company will pay the principal of,
premium (if any) and interest on
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and any Additional Amounts with respect to the Securities in Dollars. Those
amounts shall be payable at the offices of the Trustee, provided that at the
option of the Company, the Company may pay those amounts (1) by wire transfer
with respect to Global Securities or (2) by check payable in that money mailed
to a Holder's registered address with respect to any Securities.
If the Company defaults in a payment of interest on the Securities of
any series, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest on the defaulted interest, in each case at the rate
provided in the Securities of that series and in Section 4.01. The Company may
pay the defaulted interest to the Persons who are Holders on a subsequent
special record date. At least 15 days before any special record date selected by
the Company, the Company (or the Trustee, in the name of and at the expense of
the Company upon 20 days' prior written notice from the Company setting forth
that record date and the interest amount to be paid) shall mail to Holders of
any such series of Securities a notice that states the special record date, the
related payment date and the amount of that interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of that
Security for the purpose of receiving payments of principal of, premium (if any)
or interest on, or any Additional Amounts with respect to that Security and for
all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global
Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of
Section 2.01 and the provisions of Section 2.02, any such Global Security shall
represent those of the outstanding Securities of that series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee (i) in such manner and upon instructions
given by such Person or Persons as shall be specified in that Security or in a
Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii)
otherwise in accordance with written instructions or such other written form of
instructions as is customary for the Depositary for that Security, from that
Depositary or its nominee on behalf of any Person having a beneficial interest
in that Global Security. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.12, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given by the Person
or Persons specified in that
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Security or in the applicable Company Order. With respect to the Securities of
any series that are represented by a Global Security, the Company authorizes the
execution and delivery by the Trustee of a letter of representations or other
similar agreement or instrument in the form customarily provided for by the
Depositary appointed with respect to that Global Security. Any Global Security
may be deposited with the Depositary or its nominee, or may remain in the
custody of the Trustee or the Security Custodian therefor pursuant to a FAST
Balance Certificate Agreement or similar agreement between the Trustee and the
Depositary. If a Company Order has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 11.05 and need not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee or the Security Custodian as its
custodian, or under that Global Security, and the Depositary may be treated by
the Company, the Trustee or the Security Custodian and any agent of the Company,
the Trustee or the Security Custodian as the absolute owner of that Global
Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the
registered holder of a Global Security of any series may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action that a Holder of
Securities of that series is entitled to take under this Indenture or the
Securities of that series and (ii) nothing herein shall prevent the Company, the
Trustee or the Security Custodian or any agent of the Company, the Trustee, or
the Security Custodian from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01, transfers of a Global Security shall be limited to
transfers of that Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities of any series shall be transferred to all
beneficial owners of a Global Security of that series in exchange for their
beneficial interests in that Global Security if, and only if, either (1) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for that Global Security and a successor Depositary is not appointed
by the Company within 90 days of that notice, (2) an Event of Default has
occurred with respect to that series and is continuing and the Registrar has
received a request from the Depositary to issue Securities of that series in
lieu of all or a portion of that Global Security (in which case the Company
shall deliver Securities of that series within 30 days of that request) or (3)
the Company determines not to have the Securities of that series represented by
a Global Security.
In connection with any transfer of a portion of the beneficial
interests in a Global Security to beneficial owners pursuant to this Section
2.17, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee on receipt of a
Company Order for
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the authentication and delivery of Securities shall authenticate and deliver,
one or more Securities of the same series of like tenor and amount.
In connection with the transfer of all the beneficial interests in a
Global Security of any series to beneficial owners pursuant to this Section
2.17, the Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the Global Security, an equal aggregate principal
amount of Securities of that series of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities by the Depositary, or for maintaining, supervising or reviewing
any records of the Depositary relating to those Securities. Neither the Company
nor the Trustee shall be liable for any delay by the related Global Security
Holder or the Depositary in identifying the beneficial owners, and each such
Person may conclusively rely on, and shall be protected in relying on,
instructions from that Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of Section
2.04 shall apply to any Global Security if that Global Security was never issued
and sold by the Company and the Company delivers to the Trustee the Global
Security together with written instructions (which need not comply with Section
11.05 and need not be accompanied by an Opinion of Counsel) with regard to the
cancellation or reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless
otherwise specified as contemplated by Section 2.01 with respect to Securities
of any series, payment of principal of and premium (if any) and interest on and
any Additional Amounts with respect to any Global Security shall be made to the
Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to
this Indenture, it shall notify the Trustee of the Redemption Date and principal
amount of Securities of that series to be redeemed. The Company shall so notify
the Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) by delivering to the Trustee an Officers'
Certificate stating that the redemption will comply with the provisions of
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this Indenture and of the Securities of that series. Any such notice may be
canceled at any time prior to the mailing of that notice of redemption to any
Holder of the Securities of that series and shall thereupon be void and of no
effect.
SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of that series of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the outstanding
Securities of that series (and tenor) not previously called for redemption,
either pro rata, by lot or by such other method as the Trustee shall deem fair
and appropriate. That redemption may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of that series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of Global Securities of
that series.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities of any series shall relate,
in the case of any of the Securities redeemed or to be redeemed only in part, to
the portion of the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities of a series to be redeemed, at the address of
that Holder appearing in the register of Securities for that series maintained
by the Registrar.
All notices of redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of those Securities is to receive payment of the Redemption Price on
surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the
principal amount thereof to be redeemed and that on and after the
Redemption Date, on surrender
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for cancellation of that Security to the Paying Agent, a new Security or
Securities in the aggregate principal amount equal to the unredeemed
portion thereof will be issued without charge to the Holder;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if that is
the case; and
(7) the CUSIP number, if any, relating to those Securities.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, those Securities called for redemption shall be
paid at the Redemption Price, but interest installments whose maturity is on or
prior to that Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions thereof
which are to be redeemed on that date, other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of that Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not those Securities are presented for payment, and
the Holders of those Securities shall have no further rights with respect to
those Securities except for the right to receive the Redemption Price on
surrender of those Securities. If any Security called for redemption shall not
be so paid on surrender thereof for redemption, the principal of and premium, if
any, any Additional Amounts, and, to the extent lawful, accrued interest thereon
shall, until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or provided in the Securities or, in the case of
Original Issue Discount Securities, their initial yield to maturity.
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SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of that Security without service charge a new Security or
Securities, of the same series and of any authorized denomination as requested
by that Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the
Company and any Affiliate of the Company may at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Any such
acquisition shall not operate as or be deemed for any purpose to be a redemption
of the indebtedness represented by those Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee for cancellation and, on
that cancellation, the indebtedness represented thereby shall be deemed to be
satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of the minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of that series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than
any previously called for redemption) and may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant to
the terms of those Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of those Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of that series required to be made pursuant to the terms of that
series of Securities; provided that those Securities have not been previously so
credited. Those Securities shall be received and credited for that purpose by
the Trustee at the Redemption Price specified in those Securities for redemption
through operation of the sinking fund, and the amount of that sinking fund
payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate of
the Company specifying the amount of the next ensuing
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sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, that is to be satisfied by payment of cash and the
portion thereof, if any, that is to be satisfied by delivery of or by crediting
Securities of that series pursuant to Section 3.10 and will also deliver to the
Trustee any Securities to be so delivered. Failure of the Company to timely
deliver that Officers' Certificate and Securities specified in this paragraph,
if any, shall not constitute a default but shall constitute the election of the
Company (i) that the mandatory sinking fund payment for that series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of that series in respect thereof and
(ii) that the Company will make no optional sinking fund payment with respect to
that series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of any
particular series, that cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of that series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If that amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Company makes no such request, then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed on that
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.04. That notice having been
duly given, the redemption of those Securities shall be made on the terms and in
the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities of each series on
the dates and in the manner provided in the Securities of that series and in
this Indenture. Principal, premium, interest and any Additional Amounts shall be
considered paid on the date due if the Paying Agent, other than the Company or a
Subsidiary of the Company, holds on that date money deposited by the Company
designated for and sufficient to pay all principal, premium (if any), interest
and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal of and premium (if
any) on Securities of any series, at a rate equal to the then applicable
interest rate on the Securities of that series to the extent lawful; and it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest on and any overdue payments
of
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Additional Amounts with respect to Securities of that series (without regard to
any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities of that series may be presented
for registration of transfer or exchange, where Securities of that series may be
presented for payment and where notices and demands to or on the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
that office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof is located at ____________________. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of that office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, those presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all those purposes and may from time to time rescind
those designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for those
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it
files the same with the SEC, copies of the annual reports and the
information, documents and other reports (or copies of those portions of
any of the foregoing as the SEC may by rules and regulations prescribe)
that the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act. The Company shall also comply with the
provisions of TIA Section 314(a).
(b) If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule
144A Securities and prospective purchasers of Rule 144A Securities
designated by the Holders of Rule 144A Securities, promptly on their
request, the information required to be delivered pursuant to Rule
144A(d)(4) promulgated under the Securities Act of 1933, as amended.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a statement signed by an
Officer of the Company, which need not constitute an Officers' Certificate,
complying with TIA Section 314(a)(4) and stating that, in the course of
performance by the signing Officer of the Company of his or her duties as
such Officer of the Company, he or she would normally obtain knowledge
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of the keeping, observing, performing and fulfilling by the Company of its
obligations under this Indenture, and further stating that, to the best of
his or her knowledge, the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which that
Officer may have knowledge and what action the Company is taking or
proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are
outstanding, deliver to the Trustee, promptly on any Officer of the Company
becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying that Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Existence.
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its existence
and the existence of each of its Subsidiaries and all rights (charter and
statutory) of the Company and its Subsidiaries, provided that the Company shall
not be required to preserve the existence of any Subsidiary of the Company or
any such right if the Company shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole and that the loss thereof would not have a
material adverse effect on the business, operations, assets or financial
condition of the Company and its Subsidiaries taken as a whole and would not
have any material adverse effect on the payment and performance of the
obligations of the Company under the Securities and this Indenture.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist on, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of that
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any
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series or the net proceeds received from the sale or exchange of any Security of
any series, that mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section 4.07 to the extent that, in that
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section 4.07, and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
that express mention is not made.
Unless otherwise provided pursuant to Section 2.01 with respect to
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least ten days prior to the first Interest Payment
Date with respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least ten days prior to
each date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether that payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of that
series. If any such withholding shall be required, then that Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on those payments to those Holders of Securities, and the Company will pay to
that Paying Agent the Additional Amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for and to hold them
harmless against any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 4.07.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers, Consolidations and Other Transactions.
The Company shall not, in any transaction or series of related
transactions, consolidate with any other Person into, or merge into, any other
Person, or sell, lease, convey, transfer or otherwise dispose of its assets
substantially as an entirety to any Person, unless:
(1) the Person formed by that consolidation or into which the Company
is merged, or to which that sale, lease, conveyance, transfer or other
disposition shall be made (collectively, the "Successor"), expressly
assumes by supplemental indenture the due and punctual payment of the
principal of (and premium, if any) and interest on and Additional Amounts
with respect to all the Securities and the performance of the Company's
covenants and obligations under this Indenture and the Securities;
(2) immediately after giving effect to that transaction or series of
related transactions, no Default or Event of Default shall have occurred
and be continuing; and
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(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the transaction and that
supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease,
conveyance, transfer or other disposition of the assets of the Company
substantially as an entirety in accordance with Section 5.01, any Successor
formed by that consolidation or into or with which the Company is merged or to
which that sale, lease, conveyance, transfer or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under this Indenture and the Securities with the same effect as if
that Successor had been named as the Company herein and the predecessor Company,
in the case of a sale, conveyance, transfer or other disposition, shall be
released from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically
deleted or modified in or pursuant to the supplemental indenture or Board
Resolution establishing that series of Securities or in the form of Security for
that series, an "Event of Default," wherever used herein with respect to
Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any
Additional Amounts with respect to any Security of that series when the
same becomes due and payable and that default continues for a period of 30
days;
(2) the Company defaults in the payment of (A) the principal of any
Security of that series at its Maturity or (B) premium (if any) on any
Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series, and that default
continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants or
agreements in, or provisions of, the Securities of that series or this
Indenture (other than an agreement, covenant or provision that has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series) which shall not have been
remedied within the specified period after written notice, as specified in
the last paragraph of this Section 6.01;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that remains unstayed and in effect for 90 days and
that:
(A) is for relief against the Company as debtor in an involuntary
case,
(B) appoints a Bankruptcy Custodian of the Company or a
Bankruptcy Custodian for all or substantially all of the property of
the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default
unless a Trust Officer at the Corporate Trust Office of the Trustee receives
written notice at the Corporate Trust Office of the Trustee of that Default with
specific reference to that Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the
principal of, premium (if any) or interest on or Additional Amounts with respect
to any Security is payable in a currency or currencies (including a composite
currency) other than Dollars and such currency or currencies are not available
to the Company for making payment thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company (a "Conversion
Event"), the Company will be entitled to satisfy its obligations to Holders of
the Securities by making that payment in Dollars in an amount equal to the
Dollar equivalent of the amount payable in such other currency, as determined by
the Company by reference to the Exchange Rate on the date of that payment, or,
if that rate is not then available, on the basis of the most recently available
Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01,
any payment made under such circumstances in Dollars where the required payment
is in a currency other than Dollars will not constitute an Event of Default
under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall
give written notice thereof to the Trustee; and the Trustee, promptly after
receipt of that notice, shall give notice thereof in the manner provided in
Section 11.02 to the Holders. Promptly after the making of any payment in
Dollars as a result of a Conversion Event, the Company shall give
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notice in the manner provided in Section 11.02 to the Holders, setting forth the
applicable Exchange Rate and describing the calculation of those payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the then outstanding Securities of the series
affected by that Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by that
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 90 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at
the time outstanding (other than an Event of Default specified in clause (5) or
(6) of Section 6.01 hereof) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by that default (or, in the case
of an Event of Default described in clause (4) of Section 6.01, if outstanding
Securities of other series are affected by that Default, then at least 25% in
principal amount of the then outstanding Securities so affected) by notice to
the Company and the Trustee, may declare the principal of (or, if any of those
Securities are Original Issue Discount Securities, that portion of the principal
amount as may be specified in the terms of that series) and all accrued and
unpaid interest on all then outstanding Securities of that series or of all
series, as the case may be, to be due and payable. Upon any such declaration,
the amounts due and payable on those Securities shall be due and payable
immediately. If an Event of Default specified in clause (5) or (6) of Section
6.01 hereof occurs, those amounts shall ipso facto become and be immediately due
and payable without any declaration, notice or other act on the part of the
Trustee or any Holder. The Holders of a majority in principal amount of the then
outstanding Securities of the series affected by that default or all series, as
the case may be, by written notice to the Trustee may rescind an acceleration
and its consequences (other than nonpayment of principal of or premium or
interest on or any Additional Amounts with respect to the Securities) if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default with respect to Securities of that series (or of all series,
as the case may be) have been cured or waived, except nonpayment of principal,
premium, interest or any Additional Amounts that has become due solely because
of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of, or premium, if any, or interest on the Securities of
that series or to enforce the performance of any provision of the Securities of
that series or this Indenture.
The Trustee may maintain a proceeding with respect to Securities of
any series even if it does not possess any of the Securities of that series or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or
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remedy accruing on an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to that series or all series, as
the case may be, and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities of that series or all
series or a solicitation of consents in respect of Securities of that series or
all series, provided that in each case that offer or solicitation is made to all
Holders of then outstanding Securities of that series or all series (but the
terms of that offer or solicitation may vary from series to series)), except (1)
a continuing Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on or any Additional Amounts with respect to any
Security or (2) a continued Default in respect of a provision that under Section
9.02 cannot be amended or supplemented without the consent of each Holder
affected. Upon any such waiver, that Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in
principal amount of the then outstanding Securities of that series may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with that direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking that action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series
may pursue a remedy with respect to this Indenture or the Securities of that
series only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to that series;
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(2) the Holders of at least 25% in principal amount of the then
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during that 60-day period, the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and premium, if any,
and interest on and any Additional Amounts with respect to that Security, on or
after the respective due dates expressed in that Security, or to bring suit for
the enforcement of any such payment on or after those respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01
hereof occurs and is continuing with respect to Securities of any series, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company for the amount of principal, premium (if any),
interest and any Additional Amounts remaining unpaid on the Securities of that
series, and interest on overdue principal and premium, if any, and, to the
extent lawful, interest on overdue interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceeding
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make those payments
to the Trustee, and in the event that the Trustee shall consent to the making of
those payments directly to the Holders, to pay to the Trustee any amount due to
it for the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in that proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, subject
to Article X, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in
respect of which or for the benefit of which that money has been collected, for
principal, premium (if any), interest and any Additional Amounts ratably,
without preference or priority of any kind, according to the amounts due and
payable on those Securities for principal, premium (if any), interest and any
Additional Amounts, respectively; and
Third: to the Company.
The Trustee, on prior written notice to the Company, may fix record
dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining a judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of, premium (if any) or interest
on or Additional Amounts with respect to the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the New York
Business Day next preceding that on which final judgment is given. Neither the
Company nor the Trustee shall be liable for any shortfall nor shall it benefit
from any windfall in payments to Holders of Securities under this Section 6.10
caused by a change in exchange rates between the time the amount of a judgment
against it is calculated as above and the time the Trustee converts the Judgment
Currency into the Required Currency to make payments under this Section to
Holders of Securities, but payment of that judgment shall discharge all amounts
owed by the Company on the claim or claims underlying that judgment.
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SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default with respect to the Securities of any
series has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture with respect to the Securities
of that series, and use the same degree of care and skill in that exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, on certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine those certificates and opinions to determine
whether, on their face, they appear to conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity reasonably
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law. All money received by the Trustee with respect to
Securities of any series shall, until applied as herein provided, be held in
trust for the payment of the principal of, premium (if any) and interest on and
Additional Amounts with respect to the Securities of that series.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
instruction, an Officers' Certificate or an Opinion of Counsel or both to
be provided. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on that instruction, Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel,
and the written advice of that counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers conferred on it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any of
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights and duties. However, the Trustee is
subject to Sections 7.10 and 7.11.
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SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for the Company's
use of the proceeds from the Securities or any money paid to the Company or upon
the Company's direction under any provision hereof; it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee; and it shall not be responsible for any statement or recital herein
or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and it is known to the Trustee, the Trustee
shall mail to Holders of Securities of that series a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium (if any) and interest on
and Additional Amounts or any sinking fund installment with respect to the
Securities of that series, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Holders of Securities of that series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of
this Indenture, the Trustee shall mail to Holders of a series and the Company a
brief report dated as of that reporting date that complies with TIA Section
313(a); provided, however, that if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date with respect to a
series, no report need be transmitted to Holders of that series. The Trustee
also shall comply with TIA Section 313(b). The Trustee shall also transmit by
mail all reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a
series of Securities shall be filed by the Company with the SEC and each
securities exchange, if any, on which the Securities of that series are listed.
The Company shall notify the Trustee if and when any series of Securities is
listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee on
request for all reasonable disbursements, advances and expenses incurred by it.
Those expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee against any loss, liability
or expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend
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the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel, and the Company shall pay the reasonable fees and expenses of
that counsel. The Company need not pay for any settlement made without its
consent.
The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the payment obligations of the Company in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
premium (if any) and interest on and any Additional Amounts with respect to the
Securities of any series. That lien shall survive the satisfaction and discharge
of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only on the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to
the Securities of one or more series by so notifying the Company. The Holders of
a majority in principal amount of the then outstanding Securities of any series
may remove the Trustee with respect to the Securities of that series by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of those series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). Within one year after
the successor Trustee with respect to the Securities of any series takes office,
the Holders of a majority in principal amount of the Securities of that series
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
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If a successor Trustee with respect to the Securities of any series
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the then outstanding Securities of that series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of that series.
If the Trustee with respect to the Securities of a series fails to
comply with Section 7.10, any Holder of Securities of that series may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of that
series.
In case of the appointment of a successor Trustee with respect to all
Securities, each such successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
(but not all) series shall execute and deliver an indenture supplemental hereto
in which each successor Trustee shall accept that appointment and that (1) shall
confer to each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of that successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall confirm that all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee.
Nothing herein or in that supplemental indenture shall constitute those Trustees
co-trustees of the same trust, and each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee. Upon the execution and delivery of that
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, and each such successor Trustee
shall have all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
that successor Trustee relates. On the request of the Company or any successor
Trustee, that retiring Trustee shall transfer to that successor Trustee all
property held by that retiring Trustee as Trustee with respect to the Securities
of that or those series to which the appointment of that successor Trustee
relates.
Notwithstanding replacement of the Trustee or Trustees pursuant to
this Section 7.08, the obligations of the Company under Section 7.07 shall
continue for the benefit of the retiring Trustee or Trustees.
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SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to that authenticating Trustee may adopt that authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate those Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all those cases those
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia and authorized under those laws to
exercise corporate trust power, shall be subject to supervision or examination
by Federal or State (or the District of Columbia) authority and shall have, or
be a Subsidiary of a bank or bank holding company having, a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition.
The Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA Section 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions of TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to
the Securities of a series (except as to any surviving rights of conversion or
of registration of transfer or exchange of Securities expressly provided for
herein and except that the Company's
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obligations under Section 7.07, the Trustee's and Paying Agent's obligations
under Section 8.03 and the rights, powers, protections and privileges accorded
the Trustee under Article VII shall survive), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging the satisfaction and
discharge of this Indenture with respect to the Securities of that series, when:
(1) either
(A) all outstanding Securities of that series theretofore
authenticated and issued (other than destroyed, lost or stolen
Securities that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(B) all outstanding Securities of that series not theretofore
delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and, in the case of clause (i), (ii) or (iii) above, the Company has
irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i))
in trust for that purpose (x) cash in an amount, or (y) Government
Obligations, maturing as to principal and interest at such times and
in such amounts as will ensure the availability of cash in an amount
or (z) a combination thereof, which will be sufficient, in the opinion
(in the case of clauses (y) and (z)) of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the entire
indebtedness on the Securities of that series for principal and any
interest and any Additional Amounts to the date of that deposit (in
the case of Securities which have become due and payable) or for
principal, premium, if any, interest and any Additional Amounts to the
Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
2.01, to be applicable to the Securities of that series;
(2) the Company has paid or caused to be paid all other sums payable
by it hereunder with respect to the Securities of that series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to
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the Securities of that series have been complied with, together with an
Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable
to Securities of a series as contemplated by Section 2.01, the Company may
terminate certain of its obligations under this Indenture ("covenant
defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of that
series, (i) money in the currency in which payment of the Securities of
that series is to be made in an amount, or (ii) Government Obligations with
respect to that series, maturing as to principal and interest at such times
and in such amounts as will ensure the availability of money in the
currency in which payment of the Securities of that series is to be made in
an amount or (iii) a combination thereof, that is sufficient, in the
opinion (in the case of clauses (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay, without consideration of the
reinvestment of any such amounts and after payment of all taxes or other
charges or assessments in respect thereof payable by the Trustee, the
principal of and premium (if any) and interest on and any Additional
Amounts with respect to all Securities of that series on each date that
such principal, premium (if any), interest or Additional Amounts are due
and payable and (at the Stated Maturity thereof or on redemption as
provided in Section 8.01(e)) to pay all other sums payable by it hereunder;
provided that the Trustee shall have been irrevocably instructed to apply
that money and/or the proceeds of those Government Obligations to the
payment of said principal, premium (if any), interest and Additional
Amounts with respect to the Securities of that series as the same shall
become due;
(2) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of that series have been complied
with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of
that series shall have occurred and be continuing on the date of that
deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel from counsel reasonably acceptable to the Trustee or a tax ruling
to the effect that the Holders of Securities of that series will not
recognize income, gain or loss for Federal income tax purposes as a result
of the Company's exercise of its option under this Section 8.01(b) and will
be subject to Federal income tax on the same amount and in the same manner
and at the same times as would have been the case if that option had not
been exercised;
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(5) the Company has complied with any additional conditions specified
pursuant to Section 2.01 to be applicable to the discharge of Securities of
that series pursuant to this Section 8.01; and
(6) that deposit and discharge shall not cause the Trustee to have a
conflicting interest as defined in TIA Section 310(b).
In that event, this Indenture shall cease to be of further effect
(except as set forth in this paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture. However, the Company's obligations in Sections
2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the
Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers,
protections and privileges accorded the Trustee under Article VII shall survive
until all Securities of that series are no longer outstanding. Thereafter, only
the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive with respect to Securities of that
series.
After making the irrevocable deposit pursuant to this Section 8.01(b)
and following satisfaction of the other conditions set forth herein, the Trustee
on request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture with respect to the Securities of that series,
except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal of
or premium (if any) or interest on or any Additional Amounts with respect to the
Securities, the Government Obligations shall be payable as to principal or
interest on or before that payment date in such amounts as will provide the
necessary money. Any such Government Obligations shall not be callable at the
issuer's option.
(c) If the Company has previously complied or is concurrently
complying with Section 8.01(b) (other than any additional conditions specified
pursuant to Section 2.01 that are expressly applicable only to covenant
defeasance) with respect to Securities of a series, then, unless this Section
8.01(c) is specified as not being applicable to Securities of that series as
contemplated by Section 2.01, the Company may elect to be discharged ("legal
defeasance") from its obligations to make payments with respect to Securities of
that series, if:
(1) no Default or Event of Default under clauses (5) and (6) of
Section 6.01 hereof shall have occurred at any time during the period
ending on the 91st day after the date of deposit contemplated by Section
8.01(b) (it being understood that this condition shall not be deemed
satisfied until the expiration of that period);
(2) unless otherwise specified with respect to Securities of that
series as contemplated by Section 2.01, the Company has delivered to the
Trustee an Opinion of Counsel from counsel reasonably acceptable to the
Trustee to the effect referred to in Section 8.01(b)(4) with respect to
that legal defeasance, which opinion is based on (i) a private ruling of
the Internal Revenue Service addressed to the Company, (ii) a published
ruling of the Internal Revenue Service or (iii) a change in the applicable
federal income tax law (including regulations) after the date of this
Indenture;
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(3) the Company has complied with any other conditions specified
pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of that series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request
requesting legal defeasance of the Securities of that series and an
Officers' Certificate stating that all conditions precedent with respect to
legal defeasance of the Securities of that series have been complied with,
together with an Opinion of Counsel to the same effect.
In that event, the Company will be discharged from its obligations
under this Indenture and the Securities of that series to pay principal of,
premium (if any) and interest on, and any Additional Amounts with respect to,
Securities of that series, the Company's obligations under Sections 4.01, 4.02
and 5.01 shall terminate with respect to those Securities, and the entire
indebtedness of the Company evidenced by those Securities shall be deemed paid
and discharged.
(d) If and to the extent additional or alternative means of
satisfaction, discharge or defeasance of Securities of a series are specified to
be applicable to that series as contemplated by Section 2.01, the Company may
terminate any or all of its obligations under this Indenture with respect to
Securities of a series and any or all of its obligations under the Securities of
that series if it fulfills such other means of satisfaction and discharge as may
be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of that series.
(e) If Securities of any series subject to subsections (a), (b), (c)
or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the terms of the applicable trust
arrangement shall provide for that redemption, and the Company shall make such
arrangements as are reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee reasonably satisfactory to the Trustee and
the Company shall hold in trust money or Government Obligations deposited with
it pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made. Money and securities held in
trust are not subject to Article X.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company at
any time on the written request of the Company any excess money or Government
Obligations (or proceeds therefrom) held by them.
Subject to the requirements of any applicable abandoned property laws,
the Trustee and the Paying Agent shall pay to the Company on written request any
money held by
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them for the payment of principal, premium (if any), interest or any Additional
Amounts that remain unclaimed for two years after the date on which that payment
shall have become due. After payment to the Company, Holders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability
of the Trustee and the Paying Agent with respect to that money shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or
Government Obligations deposited with respect to Securities of any series in
accordance with Section 8.01 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting that application, the obligations of the
Company under this Indenture with respect to the Securities of that series and
under the Securities of that series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee or
the Paying Agent is permitted to apply all such money or Government Obligations
in accordance with Section 8.01; provided, however, that if the Company has made
any payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
those Securities to receive such payment from the money or Government
Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities or waive any provision hereof or thereof without the consent of
any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to provide for the issuance of bearer
Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add
guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if those covenants are to
be for the benefit of less than all series of Securities, stating that
those covenants are expressly being included solely
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for the benefit of that series), or to surrender any right or power herein
conferred on the Company;
(7) to add any additional Events of Default with respect to all or any
series of the Securities (and, if any such Event of Default is applicable
to less than all series of Securities, specifying the series to which that
Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no outstanding Security of any series created prior to the
execution of that amendment or supplemental indenture that is adversely
affected in any material respect by that change in or elimination of that
provision;
(9) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 8.01; provided,
however, that any such action shall not adversely affect the interest of
the Holders of Securities of that series or any other series of Securities
in any material respect; or
(11) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 7.08.
Upon the request of the Company, accompanied by a Board Resolution,
and upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall, subject to Section 9.06, join with the Company in the execution
of any supplemental indenture authorized or permitted by the terms of this
Indenture and make any further appropriate agreements and stipulations that may
be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities of any one or more series or all series or a solicitation of
consents in respect of Securities of any one or more series or all series,
provided that in each case that offer or solicitation is made to all Holders of
then outstanding Securities of each such series (but the terms of that offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by that amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution,
and upon the filing with the Trustee of evidence of the consent of the Holders
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall, subject to
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Section 9.06, join with the Company in the execution of that amendment or
supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if that consent approves the
substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities of one or more series or of all series may waive compliance in a
particular instance by the Company with any provision of this Indenture with
respect to Securities of that series (including waivers obtained in connection
with a tender offer or exchange offer for Securities of that series or a
solicitation of consents in respect of Securities of that series, provided that
in each case that offer or solicitation is made to all Holders of then
outstanding Securities of that series (but the terms of that offer or
solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of, premium on or any mandatory sinking fund
payment with respect to, or change the Stated Maturity of, any Security or
reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable on a declaration of acceleration of the
Maturity thereof pursuant to Section 6.02;
(4) reduce the premium, if any, payable on the redemption of any
Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts
with respect to any Security;
(6) change the coin or currency or currencies (including composite
currencies) in which any Security or any premium, interest or Additional
Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of this
Indenture pursuant to Section 6.04 or 6.07 or make any change in this
sentence of Section 9.02;
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(9) modify the provisions of this Indenture with respect to the
subordination of any Security in a manner adverse to the Holder thereof; or
(10) waive a continuing Default or Event of Default in the payment of
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of an issue of Senior
Indebtedness of the Company unless the holders of the issue pursuant to its
terms consent to the change.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of that series with respect to that
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from that Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which that consent is required or sought as of
a date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail that notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities
shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
(which need not comply with Section 316(c) of the TIA) for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver or to take any other action under this
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Indenture. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those Persons who were Holders at that record
date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to that amendment, supplement or waiver or to revoke any
consent previously given, whether or not those Persons continue to be Holders
after that record date. No consent shall be valid or effective for more than 90
days after that record date unless consents from Holders of the principal amount
of Securities required hereunder for that amendment or waiver to be effective
shall have also been given and not revoked within that 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (9) of Section 9.02 hereof. In that case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security at
the request of the Company regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of that amendment or supplement.
Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Company, bear a notation in form approved by the Company as to any matter
provided for in that amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign that
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying on, an Opinion of
Counsel provided at the expense of the Company as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding on the Company
in accordance with its terms.
ARTICLE X
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness.
The Company and each Holder of a Security, by his or her acceptance
thereof, agree that (a) the payment of the principal of, premium (if any) and
interest on and any Additional Amounts with respect to each and all the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of Securities by
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the Company, is subordinated, to the extent and in the manner provided in this
Article X, to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, and that these subordination
provisions are for the benefit of the holders of Senior Indebtedness of the
Company.
Each Holder of a Security, by his or her acceptance thereof,
acknowledges and agrees that the provisions of this Article X are, and are
intended to be, an inducement and a consideration to all Persons who, in
reliance on such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Company, and such provisions are made for the benefit of the
holders of Senior Indebtedness of the Company, and those holders are made
obligees hereunder, and any one or more of them may enforce such provisions.
SECTION 10.02 No Payment on Securities in Certain Circumstances.
(a) Unless otherwise specified with respect to Securities of a series
as contemplated by Section 2.01, no payment shall be made by or on behalf
of the Company on account of the principal of, premium (if any) or interest
on or any Additional Amounts with respect to the Securities of any series
or to acquire any of those Securities (including any repurchases of those
Securities pursuant to the provisions thereof at the option of the Holder
of those Securities) for cash or property (other than Junior securities of
the Company), or on account of any redemption provisions of those
Securities, in the event of default in payment of any principal of, premium
(if any) or interest on any Senior Indebtedness of the Company when the
same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise (a "Payment
Default"), unless and until that Payment Default has been cured or waived
or otherwise has ceased to exist.
(b) Unless otherwise specified with respect to Securities of a series
as contemplated by Section 2.01, no payment shall be made by or on behalf
of the Company on account of the principal of, premium (if any) or interest
on or any Additional Amounts with respect to the Securities of any series
or to acquire any of those Securities (including any repurchases of those
Securities pursuant to the provisions thereof at the option of the Holder
of those Securities) for cash or property (other than Junior securities of
the Company), or on account of the redemption provisions of those
Securities, in the event of any event of default (other than a Payment
Default) with respect to any Designated Senior Indebtedness permitting the
holders of that Designated Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare that Designated
Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, on written notice thereof to the
Company and the Trustee by any holders of Designated Senior Indebtedness
(or a trustee or other representative on behalf of the holders thereof)
(the "Payment Blocking Notice"), unless and until that event of default
shall have been cured or waived or otherwise has ceased to exist; provided,
that such payments may not be prevented pursuant to this Section 10.02(b)
for more than 179 days after an applicable Payment Blocking Notice has been
received by the Trustee unless the Designated Senior Indebtedness in
respect of which that event of default exists has been declared due and
payable in its entirety, in which case no such
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payment may be made until that acceleration has been rescinded or annulled
or that Designated Senior Indebtedness has been paid in full. Unless
otherwise specified with respect to Securities of a series as contemplated
by Section 2.01, no event of default that existed or was continuing on the
date of any Payment Blocking Notice (whether or not that event of default
is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Blocking Notice, and only one such
Payment Blocking Notice may be given in any period of 365 consecutive days.
(c) In furtherance of the provisions of Section 10.01, in the event
that, notwithstanding the foregoing provisions of this Section 10.02, any
payment or distribution of assets of the Company (other than Junior
securities of the Company) shall be received by the Trustee or the Holders
of the Securities of any series or any Paying Agent with respect thereto at
a time when that payment or distribution was prohibited by the provisions
of this Section 10.02, then, unless that payment or distribution is no
longer prohibited by this Section 10.02, that payment or distribution
(subject to the provisions of Section 10.07) shall be received and held in
trust by the Trustee or such Holders or Paying Agent for the benefit of the
holders of Senior Indebtedness of the Company, and shall be paid or
delivered by the Trustee or such Holders or Paying Agent, as the case may
be, to the holders of Senior Indebtedness of the Company remaining unpaid
or unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing that Senior Indebtedness of the Company may have been issued,
ratably, according to the aggregate amounts remaining unpaid on account of
that Senior Indebtedness of the Company held or represented by each, for
application to the payment of all Senior Indebtedness of the Company in
full after giving effect to all concurrent payments and distributions to or
for the holders of that Senior Indebtedness.
SECTION 10.03 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or similar proceeding or upon assignment for the benefit of
creditors:
(a) the holders of all Senior Indebtedness of the Company shall first
be entitled to receive payments in full before the Holders of Securities of
any series are entitled to receive any payment (other than in the form of
Junior securities of the Company) on account of the principal of, premium
(if any) or interest on or any Additional Amounts with respect to those
Securities;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Junior
securities of the Company), to which the Holders of Securities of any
series or the Trustee on behalf of those Holders would be entitled, except
for the provisions of this Article X, shall be paid by the liquidating
trustee or agent or other Person making such a payment or distribution
directly to the holders of that Senior Indebtedness or their
representative, ratably
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according to the respective amounts of Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full of all
that Senior Indebtedness remaining unpaid after giving effect to all
concurrent payments and distributions to the holders of that Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior securities of the Company),
shall be received by the Trustee or the Holders of Securities of any series
or any Paying Agent with respect thereto (or, if the Company or any
Affiliate of the Company is acting as its own Paying Agent, money for any
such payment or distribution shall be segregated or held in trust) on
account of the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of that series before all
Senior Indebtedness of the Company is paid in full, that payment or
distribution (subject to the provisions of Section 10.07) shall be received
and held in trust by the Trustee or such Holder or Paying Agent for the
benefit of the holders of that Senior Indebtedness, or their respective
representatives, ratably according to the respective amounts of that Senior
Indebtedness held or represented by each, to the extent necessary to make
payment as provided herein of all that Senior Indebtedness remaining unpaid
after giving effect to all concurrent payments and distributions and all
provisions therefor to or for the holders of that Senior Indebtedness, but
only to the extent that as to any holder of that Senior Indebtedness, as
promptly as practical following notice from the Trustee to the holders of
that Senior Indebtedness that such prohibited payment has been received by
the Trustee, Holder(s) or Paying Agent (or has been segregated as provided
above), that holder (or a representative therefor) notifies the Trustee of
the amounts then due and owing on that Senior Indebtedness, if any, held by
that holder, and only the amounts specified in those notices to the Trustee
shall be paid to the holders of that Senior Indebtedness.
SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of the Securities shall be subrogated
(to the extent of the payments or distributions made to the holders of that
Senior Indebtedness pursuant to the provisions of this Article X) to the rights
of the holders of that Senior Indebtedness to receive payments or distributions
of assets of the Company applicable to that Senior Indebtedness until all
amounts owing on the Securities shall be paid in full. For the purpose of that
subrogation, no such payments or distributions to the holders of that Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article X, which otherwise would have been made to those
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness of the Company and those Holders, be deemed to be payment by
the Company or on account of that Senior Indebtedness, it being understood that
the provisions of this Article X are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of that Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article X
shall have been applied,
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pursuant to the provisions of this Article X, to the payment of amounts payable
under Senior Indebtedness of the Company, then those Holders shall be entitled
to receive from the holders of that Senior Indebtedness any payments or
distributions received by those holders of Senior Indebtedness of the Company in
excess of the amount sufficient to pay all amounts payable under or in respect
of that Senior Indebtedness in full.
SECTION 10.05 Obligations of the Company Unconditional.
Nothing contained in this Article X or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and the
Holders of the Securities of any series, the obligation of the Company, which is
absolute and unconditional, to pay to those Holders the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of that series as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of those Holders and creditors of the Company other than the holders of
Senior Indebtedness of the Company, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law on default under this Indenture, subject to the rights, if any,
under this Article X, of the holders of Senior Indebtedness of the Company in
respect of cash, property or securities of the Company received on the exercise
of any such remedy. Notwithstanding anything to the contrary in this Article X
or elsewhere in this Indenture or in the Securities, on any distribution of
assets of the Company referred to in this Article X, the Trustee, subject to the
provisions of Sections 7.01 and 7.02, and the Holders of the Securities shall be
entitled to rely on any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
those Holders for the purpose of ascertaining the Persons entitled to
participate in that distribution, the holders of Senior Indebtedness of the
Company and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X so long as that court has been apprised
of the provisions of, or the order, decree or certificate makes reference to,
the provisions of this Article X.
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to that
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness of the Company or from any representative therefor and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.01 and 7.02, shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 10.07 Application by Trustee of Amounts Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Holders of the
Securities of the series for the benefit of which those amounts were deposited,
and, to the extent allocated for the payment of Securities
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of that series, shall not be subject to the subordination provisions of this
Article X. Otherwise, any deposit of assets with the Trustee or the Paying Agent
(whether or not in trust) for the payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Securities shall be
subject to the provisions of Sections 10.01, 10.02, 10.03 and 10.04; provided
that if prior to two Business Days preceding the date on which by the terms of
this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of either principal of, premium (if
any) or interest on or any Additional Amounts with respect to any Security), the
Trustee or such Paying Agent shall not have received with respect to those
assets the written notice provided for in Section 10.06, then the Trustee or
such Paying Agent shall have full power and authority to receive those assets
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
that date; and provided further that nothing contained in this Article X shall
prevent the Company from making, or the Trustee from receiving or applying, any
payment in connection with the redemption of Securities if the first publication
of notice of that redemption (whether by mail or otherwise in accordance with
this Indenture) has been made, and the Trustee has received that payment from
the Company, prior to the occurrence of any of the contingencies specified in
Section 10.02 or 10.03.
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
of the Company to enforce the subordination provisions contained in this Article
X shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company with the terms
of this Indenture, regardless of any knowledge thereof that any such holder may
have or be otherwise charged with. The holders of Senior Indebtedness of the
Company may extend, renew, modify or amend the terms of the Senior Indebtedness
or any security therefor and release, sell or exchange that security and
otherwise deal freely with the Company, all without affecting the liabilities
and obligations of the parties to this Indenture or the Holders of the
Securities.
SECTION 10.09 Trustee to Effectuate Subordination of Securities.
Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article X and to protect the rights of the Holders of the Securities
pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for
that purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Securities
in the form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form required
in that proceeding prior to 30 days before the expiration of the time to file
such claim or claims, then the holders of Senior Indebtedness of the Company or
their representative is hereby authorized to have the right to file and is
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities. Nothing herein contained shall be deemed to
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authorize the Trustee or the holders of Senior Indebtedness of the Company or
their representative to authorize or consent to or accept or adopt on behalf of
any Holder of Securities any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness of the Company or
their representative to vote in respect of the claim of any Holder of the
Securities in any such proceeding.
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article X in respect of any Senior Indebtedness of the
Company at any time held by it to the same extent as any other holder of Senior
Indebtedness of the Company, and nothing in this Indenture shall be construed to
deprive the Trustee of any of its rights as such holder.
SECTION 10.11 Article X Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium
(if any) or interest on or any Additional Amounts with respect to the Securities
by reason of any provision of this Article X shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section 6.01
or in any way prevent the Holders of the Securities from exercising any right
hereunder other than the right to receive payment on the Securities.
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company, and shall not be liable to any of
those holders (other than for its willful misconduct or gross negligence) if it
shall in good faith mistakenly pay over or distribute to the Holders of the
Securities or the Company or any other Person, cash, property or securities to
which any holders of Senior Indebtedness of the Company shall be entitled by
virtue of this Article X or otherwise. Nothing in this Section 10.12 shall
affect the obligation of any other such Person to hold that payment for the
benefit of, and to pay that payment over to, the holders of Senior Indebtedness
of the Company or their representative.
SECTION 10.13 Article Applicable to Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article X shall in that case (unless the context shall otherwise
require) be construed as extending to and including that Paying Agent within its
meaning as fully for all intents and purposes as if that Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that this Section 10.13 shall not apply to the Company or any Affiliate of the
Company if it or that Affiliate acts as Paying Agent.
53
59
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of TIA Section 318(c), the imposed duties shall
control.
SECTION 11.02 Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telex, facsimile or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
McDermott International, Inc.
1450 Poydras Street
New Orleans, Louisiana 70112-6050
Attention: General Counsel
If to the Trustee:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.
54
60
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to
the Trustee or the Company by Holders, shall be in writing, except as otherwise
set forth herein.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of that notice.
SECTION 11.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 11.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of that
counsel, all those conditions precedent and covenants have been complied
with.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(1) a statement that the Person making that certificate or opinion has
read that covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation on which the statements or opinions contained in that
certificate or opinion are based;
(3) a statement that, in the opinion of that Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not that covenant or
condition has been complied with; and
55
61
(4) a statement as to whether or not, in the opinion of that Person,
that condition or covenant has been complied with.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 11.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of
the Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of those obligations or their creation. Each Holder by
accepting a Security waives and releases all that liability. The waiver and
release shall be part of the consideration for the issue of Securities.
SECTION 11.09 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PRINCIPLES OF CONFLICTS OF LAWS THEREUNDER TO THE EXTENT THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.12 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the fullest extent permitted by applicable
law, not in any way be affected or impaired thereby.
56
62
SECTION 11.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
57
63
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
MCDERMOTT INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
-----------------------------------------
as Trustee
By:
-------------------------------------
Name:
Title:
58
EX-5.1
7
h90172ex5-1.txt
OPINION OF BAKER BOTS LLP
1
EXHIBIT 5.1
[Letterhead of Baker Botts L.L.P.]
September 14, 2001
McDermott International, Inc.
1450 Poydras Street
New Orleans, Louisiana 70112-6050
Gentlemen:
McDermott International, Inc., a Panamanian corporation ("McDermott"),
has engaged us to render to it the opinions we express below in connection with
its offering of the following securities (the "Securities") which McDermott may
offer, issue and sell from time to time at an aggregate initial offering price
that will not exceed $300,000,000:
o its unsecured senior and subordinated debt securities;
o shares of its common stock, par value $1.00 per share;
o shares of its preferred stock, par value $1.00 per share; and
o warrants to purchase the other Securities.
Concurrently with our delivery of this letter, McDermott is filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "1933 Act"), a registration statement on Form S-3 which relates to
its offering and sale of the Securities under the 1933 Act's Rule 415. In this
letter, "Registration Statement" means that registration statement when it
becomes effective under the 1933 Act, and "Prospectus" means the prospectus the
Registration Statement includes.
For purposes of the opinions we express below, we have examined, among
other agreements, instruments and documents, the following:
o the Registration Statement and its exhibits, including:
o Exhibit 4.4 (the "Senior Debt Indenture Form"); and
o Exhibit 4.5 (the "Subordinated Debt Indenture Form"); and
o McDermott's articles of incorporation and amended and restated
by-laws, each as amended through the date of this letter (the "Charter
Documents").
We base the opinions we express below in part on the following
assumptions we have made:
2
McDermott International, Inc. -2- September 14, 2001
o McDermott is a corporation duly incorporated and validly existing in
good standing under the laws of the Republic of Panama;
o the Registration Statement and each post-effective amendment thereto,
if any, will have become effective under the 1933 Act;
o for each type or series of Securities McDermott offers by means of the
Prospectus, McDermott will have prepared and filed with the SEC under
the 1933 Act a prospectus supplement that describes that type or
series and, if Securities of another type or series are issuable on
the conversion, exchange, redemption or exercise of the Securities
McDermott is so offering, which also describes that other type or
series;
o McDermott will have offered, issued and sold the Securities in the
manner the Registration Statement and the relevant prospectus
supplements describe and otherwise in compliance with all applicable
federal and state securities laws;
o in the case of Securities of any type which McDermott issues and
sells, the board of directors of McDermott or any committee of one or
more members of that board which that board has duly designated in
accordance with the Charter Documents and the applicable laws of the
Republic of Panama (that board or any such committee being the
"Board") will have taken all corporate action necessary to:
o authorize the issuance of those Securities and the other
Securities, if any, issuable on the conversion, exchange,
redemption or exercise of those Securities; and
o approve the terms of the offering and sale of those Securities;
o in the case of any Securities issuable on the conversion, exchange,
redemption or exercise of other Securities, those Securities will be
available for issuance on that conversion, exchange, redemption or
exercise;
o in the case of debt securities of any series the Securities include:
o if those debt securities will not be subordinated to any other
indebtedness of McDermott, an indenture substantially in the form
of the Senior Debt Indenture Form will have been duly executed
and delivered by McDermott and the trustee under that indenture;
o if those debt securities will be subordinated to other
indebtedness of McDermott, an indenture substantially in the form
of the Subordinated Debt Indenture Form will have been duly
executed and delivered by McDermott and the trustee under that
indenture;
o in accordance with the terms of the indenture under which those
debt securities will be issued, the Board will have designated
and established
3
McDermott International, Inc. -3- September 14, 2001
the terms of the series to which those debt securities belong and
those debt securities will not include any provision that is
unenforceable;
o the indenture under which those debt securities will be issued
will have become qualified under the Trust Indenture Act of 1939;
and
o forms of securities complying with the terms of the indenture
under which those debt securities will be issued and evidencing
those debt securities will have been duly executed,
authenticated, issued and delivered in accordance with the
provisions of that indenture and either:
o the provisions of the applicable purchase agreement under
which McDermott will sell those Securities; or
o if issued on conversion, exchange, redemption or exercise of
any other Securities, the applicable provisions of that
Security or the agreement or instrument under which that
conversion, exchange, redemption or exercise will be
effected;
o in the case of shares of preferred stock of any series the Securities
include, the Board will have duly adopted resolutions designating and
establishing the terms of that series and caused any applicable filing
with respect to the establishment of that series to be prepared and
filed with the appropriate authorities of the Republic of Panama;
o in the case of any warrants the Securities include, the Board will
have established the terms of those warrants, the warrant agreement
under which those warrants will be issued will have been duly executed
and delivered by McDermott and the warrant agent under that warrant
agreement, and neither those warrants nor that warrant agreement will
include any provision that is unenforceable;
o in the case of shares of common or preferred stock or warrants the
Securities include, certificates representing those shares or warrants
will have been duly executed, countersigned, registered and delivered
in accordance with the provisions of the Charter Documents and either:
o the provisions of the applicable purchase agreement under which
McDermott will sell those Securities; or
o if issued on conversion, exchange, redemption or exercise of any
other Securities, the applicable provisions of that Security or
the agreement or instrument under which that conversion,
exchange, redemption or exercise will be effected;
o in the case of each share of common or preferred stock the Securities
include, the purchase price therefor payable to McDermott, or, if
those shares are issuable on the conversion, exchange, redemption or
exercise of another Security, the
4
McDermott International, Inc. -4- September 14, 2001
consideration payable to McDermott for that conversion, exchange,
redemption or exercise will not be less than the par value of that
share; and
o McDermott and the initial purchasers of the Securities of any type
will have duly authorized, executed and delivered a definitive
purchase agreement relating to those Securities.
On the basis of and subject to the foregoing, we are of the opinion
that the debt securities and the warrants the Securities include will, when
issued, constitute legal, valid and binding obligations of McDermott, entitled
to the benefits of the applicable indenture (in the case of the debt securities)
or warrant agreement (in the case of the warrants) under which they are issued
and enforceable against McDermott in accordance with their terms, except as that
enforcement is subject to (a) any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or other laws
relating to or affecting creditors' rights generally, (b) general principles of
equity (regardless of whether that enforceability is considered in a proceeding
in equity or at law) and (c) any implied covenants of good faith and fair
dealing.
We limit the opinions we express above in all respects to matters of
the laws of the State of New York, as in effect on the date hereof.
We hereby consent to the filing of this opinion of counsel as Exhibit
5.1 to the Registration Statement. We also consent to the reference to our Firm
under the heading "Legal Opinions" in the Prospectus. In giving this consent, we
do not hereby admit we are in the category of persons whose written consent
Section 7 of the 1933 Act requires to be filed with the Registration Statement.
Very truly yours,
/s/ BAKER BOTTS L.L.P.
EX-5.2
8
h90172ex5-2.txt
OPINION OF DURLING & DURLING
1
EXHIBIT 5.2
[LETTERHEAD OF DURLING & DURLING]
September 12, 2001
McDermott International, Inc.
1450 Poydras Street
New Orleans, Louisiana 70112-6050
Gentlemen:
McDermott International, Inc., a Panamanian corporation ("McDermott"),
has engaged us to render to it the opinions we express below in connection with
its offering of the following securities (the "Securities") which McDermott may
offer, issue and sell from time to time at an aggregate initial offering price
that will not exceed $300,000,000:
o its unsecured senior and subordinated debt securities;
o shares of its common stock, par value $1.00 per share;
o shares of its preferred stock, par value $1.00 per share; and
o warrants to purchase the other Securities.
Concurrently with our delivery of this letter, McDermott is filing
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "1933 Act"), a registration statement on Form S-3 which relates to
its offering and sale of the Securities under the 1933 Act's Rule 415. In this
letter, "Registration Statement" means that registration statement when it
becomes effective under the 1933 Act, and "Prospectus" means the prospectus the
Registration Statement includes.
For purposes of the opinions we express below, we have examined, among
other agreements, instruments and documents, the following:
o the Registration Statement and its exhibits; and
o McDermott's articles of incorporation and amended and restated
by-laws, each as amended through the date of this letter (the "Charter
Documents").
We base the opinions we express below in part on the following
assumptions we have made:
o the Registration Statement and each post-effective amendment thereto,
if any, will have become effective under the 1933 Act;
o for each type or series of Securities McDermott offers by means of the
Prospectus, McDermott will have prepared and filed with the SEC under
the 1933
2
McDermott International, Inc. -2- September 12, 2001
Act a prospectus supplement that describes that type or series and, if
Securities of another type or series are issuable on the conversion,
exchange, redemption or exercise of the Securities McDermott is so
offering, which also describes that other type or series;
o McDermott will have offered, issued and sold the Securities in the
manner the Registration Statement and the relevant prospectus
supplements describe and otherwise in compliance with all applicable
federal and state securities laws;
o in the case of Securities of any type which McDermott issues and
sells, the board of directors of McDermott or any committee of one or
more members of that board which that board has duly designated in
accordance with the Charter Documents and the applicable laws of the
Republic of Panama (that board or any such committee being the
"Board") will have taken all corporate action necessary to:
o authorize the issuance of those Securities and the other
Securities, if any, issuable on the conversion, exchange,
redemption or exercise of those Securities; and
o approve the terms of the offering and sale of those Securities;
o in the case of any Securities issuable on the conversion, exchange,
redemption or exercise of other Securities, those Securities will be
available for issuance on that conversion, exchange, redemption or
exercise;
o in the case of shares of preferred stock of any series the Securities
include, the Board will have duly adopted resolutions designating and
establishing the terms of that series and caused a Board resolution
with respect to that series to be prepared and filed with the Public
Registry Office of the Republic of Panama;
o in the case of any warrants the Securities include, the Board will
have established the terms of those warrants, the warrant agreement
under which those warrants will be issued will have been duly executed
and delivered by McDermott and the warrant agent under that warrant
agreement and neither those warrants nor that warrant agreement will
include any provision that is unenforceable;
o in the case of shares of common or preferred stock or warrants the
Securities include, certificates representing those shares or warrants
will have been duly executed, countersigned, registered and delivered
in accordance with the provisions of the Charter Documents and either:
o the provisions of the applicable purchase agreement under which
McDermott will sell those Securities; or
o if issued on conversion, exchange, redemption or exercise of any
other Securities, the applicable provisions of that Security or
the agreement or
3
McDermott International, Inc. -3- September 12, 2001
instrument under which that conversion, exchange, redemption or
exercise will be effected;
o in the case of each share of common or preferred stock the Securities
include, the purchase price therefor payable to McDermott, or, if
those shares are issuable on the conversion, exchange, redemption or
exercise of another Security, the consideration payable to McDermott
for that conversion, exchange, redemption or exercise will not be less
than the par value of that share; and
o McDermott and the initial purchasers of the Securities of any type
will have duly authorized, executed and delivered a definitive
purchase agreement relating to those Securities.
On the basis of and subject to the foregoing, we are of the opinion
that:
1. McDermott is a corporation duly incorporated and validly existing
in good standing under the laws of the Republic of Panama.
2. The shares of common stock and preferred stock the Securities
include will, when issued, have been duly authorized and validly issued and
will be fully paid and nonassessable.
3. The courts of the Republic of Panama will enforce judgments of
United States courts in actions against McDermott obtained in such courts
predicated on the civil liability provisions of the United States federal
securities laws, provided any such judgment is approved by the Supreme
Court of Panama.
4. The courts of the Republic of Panama will not impose, in original
actions, liabilities against McDermott predicated solely on the United
States federal securities laws.
We also confirm that the statement under the heading "Enforceability
of Civil Liabilities" which attributes certain opinions to us is correct.
We limit the opinions we express above in all respects to matters of
the laws of the Republic of Panama, as in effect on the date hereof. This
opinion is to be governed by and construed in accordance with the laws of Panama
and is limited to, and is given on the basis of, the current practice in Panama.
We hereby consent to the filing of this opinion of counsel as Exhibit
5.2 to the Registration Statement. We also consent to the reference to our Firm
under the headings "Legal Opinions" and "Enforceability of Civil Liabilities"
in the Prospectus. In giving this consent, we do not hereby admit we are in the
category of persons whose written consent Section 7 of the 1933 Act requires to
be filed with the Registration Statement.
Very truly yours,
/s/ DURLING & DURLING
EX-12.1
9
h90172ex12-1.txt
COMPUTATION OF RATIOS OF EARNIGS TO FIXED CHARGES
1
EXHIBIT 12.1
McDERMOTT INTERNATIONAL INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Six Months Nine-Month
Ended Year Ended Period Ended Year Ended March 31,
June 30, December 31, December 31, -------------------------------------
2001 2000 1999 1999 1998 1997
-------- -------- ------- --------- --------- ---------
EARNINGS:
Income (loss) from continuing
operations before provision for
income taxes, extraordinary items
and cumulative effect of
accounting change .................... $ 16,383 $ (9,977) $35,098 $ 187,278 $ 291,807 $(220,697)
Adjust for:
Minority interest income ............... -- -- -- (3,516) (6,215) (12,112)
Equity in undistributed
earnings of affiliates ............... (6,868) 18,624 10,826 9,218 (11,901) 18,827
Plus:
Interest expense ....................... 19,781 43,709 35,743 63,262 81,454 95,100
Portion of rents representative
of the interest factor ............... 8,298 14,687 11,616 32,272 31,019 30,844
-------- -------- ------- --------- --------- ---------
$ 37,594 $ 67,043 $93,283 $ 288,514 $ 386,164 $ (88,038)
======== ======== ======= ========= ========= =========
FIXED CHARGES:
Interest expense, including
amount capitalized ................... $ 20,591 $ 46,098 $37,679 $ 63,840 $ 82,347 $ 95,924
Portion of rents representative
of the interest factor ............... 8,298 14,687 11,616 32,272 31,019 30,844
-------- -------- ------- --------- --------- ---------
$ 28,889 $ 60,785 $49,295 $ 96,112 $ 113,366 $ 126,768
======== ======== ======= ========= ========= =========
Ratio of earnings to fixed charges .......... 1.30 1.10 1.89 3.00 3.41 --
-------- -------- ------- --------- --------- ---------
Earnings surplus (deficit) .................. $ 8,705 $ 6,258 $43,988 $ 192,402 $ 272,798 $(214,806)
EX-23.1
10
h90172ex23-1.txt
CONSENT OF PRICEWATERHOUSECOOPERS LLP
1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 23, 2001 relating to the
financial statements of McDermott International, Inc., which appear in
McDermott International, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 2000. We also consent to the incorporation by reference of our
report dated February 23, 2001, except for Note 4 as to which the date is April
5, 2001, relating to the financial statement schedule of McDermott
International, Inc. which appears in such Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report dated February 23, 2001
relating to the financial statements of The Babcock & Wilcox Company which
appears as an exhibit in McDermott International, Inc.'s Annual Report on Form
10-K for the year ended December 31, 2000. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New Orleans, Louisiana
September 14, 2001