-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZBuMWs55enYyY7H/6VxFi7JnigeafOvdJRgsCmLShh/GBTZNoBi7vtFalLAIPoM Awq2IZLciNAe7v8YJUdCHw== 0000909518-01-000037.txt : 20010123 0000909518-01-000037.hdr.sgml : 20010123 ACCESSION NUMBER: 0000909518-01-000037 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEACOR SMIT INC CENTRAL INDEX KEY: 0000859598 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 133542736 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-53874 FILM NUMBER: 1510798 BUSINESS ADDRESS: STREET 1: 11200 WESTHEIMER STE 850 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7137825990 MAIL ADDRESS: STREET 1: 11200 WESTHEIMER STREET 2: SUITE 850 CITY: HOUSTON STATE: TX ZIP: 77042 FORMER COMPANY: FORMER CONFORMED NAME: SEACOR HOLDINGS INC DATE OF NAME CHANGE: 19950327 FORMER COMPANY: FORMER CONFORMED NAME: SEACORE HOLDINGS INC DATE OF NAME CHANGE: 19950313 S-3 1 0001.txt As filed with the Securities and Exchange Commission on January 18, 2001 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------ SEACOR SMIT INC. (Exact name of registrant as specified in its charter) DELAWARE 13-3542736 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 11200 RICHMOND AVE., SUITE 400 HOUSTON, TEXAS 77082 (713) 782-5990 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------ RANDALL BLANK EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY 1370 AVENUE OF THE AMERICAS, 25TH FLOOR NEW YORK, NEW YORK 10019 (212) 307-6633 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------ COPY TO: David E. Zeltner, Esq. Deanna L. Kirkpatrick, Esq. Rod D. Miller, Esq. Davis Polk & Wardwell WEIL, GOTSHAL & MANGES LLP 450 LEXINGTON AVENUE 767 FIFTH AVENUE NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10153 (212) 450-4000 (212) 310-8000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective. If the only securities being registered on this form are being 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, 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 earliest 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 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 Security Amount to be Offering Price Aggregate Offering to be Registered Registered (1) Per Share (2) Price (2) Registration Fee - --------------------------- -------------------------- -------------------------- ------------------------ ----------------------- Common Stock, par value $.01 per share 1,136,365 shares $52.25 $59,375,071 $14,844 - --------------------------- -------------------------- -------------------------- ------------------------ -----------------------
(1) Maximum number of shares issuable upon conversion of $50,000,000 in aggregate principal amount of Registrant's 5- 3/8% Convertible Subordinated Notes due 2006. (2) Estimated solely for the purpose of calculating the registration fee. Calculated on the basis of the average of the high and low reported prices of the Registrant's Common Stock on the New York Stock Exchange on January 16, 2001 pursuant to Rule 457(c) under the Securities Act of 1933. 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. NY2:\964364\14\K_3W14!.DOC\73293.0004 The information contained in this prospectus is not complete and may be changed. We may not sell any shares of the common stock wuntil our registration statement file with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities inany jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED JANUARY 18, 2001 1,136,365 Shares SEACOR SMIT INC. Common Stock ----------------- This prospectus covers the issuance of up to a maximum of 1,136,365 shares of our common stock, par value $.01 per share, to Credit Suisse First Boston Corporation under the standby arrangement described in this prospectus under "Standby Arrangement and Equity Forward Transaction" and the reoffering of any of our common stock issued under that standby arrangement. Our common stock is listed on the New York Stock Exchange under the symbol "CKH." On January 17, 2001, the last reported sale price of our common stock was $50.25 per share. Our executive offices are located at 11200 Richmond Ave., Suite 400, Houston, Texas 77082 and our telephone number is (713) 782-5990. INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 4. 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. CREDIT SUISSE FIRST BOSTON The date of this prospectus is January __, 2001. TABLE OF CONTENTS
Page Page PROSPECTUS SUMMARY...................... 3 USE OF PROCEEDS......................... 11 RISK FACTORS............................ 4 STANDBY ARRANGEMENT AND EQUITY FORWARD-LOOKING STATEMENTS.............. 9 FORWARD TRANSACTION................... 11 WHERE YOU CAN FIND MORE PLAN OF DISTRIBUTION.................... 12 INFORMATION........................... 10 LEGAL MATTERS........................... 13 INCORPORATION OF DOCUMENTS BY EXPERTS................................. 13 REFERENCE............................. 10
You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document. 2 PROSPECTUS SUMMARY This summary may not contain all the information that may be important to you. You should read the entire prospectus, including the additional documents to which we refer you, before making an investment decision. In this prospectus "we," "our," "us," and "SEACOR" refer to SEACOR SMIT Inc., its consolidated subsidiaries and its equity interest in Chiles Offshore Inc. ABOUT SEACOR SMIT INC. We are a major provider of offshore marine services to the oil and gas exploration and production industry. We are also one of the leading providers of oil spill response services to owners of tank vessels and oil storage, processing and handling facilities, and own a substantial minority equity interest in a company that owns and operates mobile offshore jackup drilling rigs. Additional information regarding us, including our audited financial statements and descriptions of our business, is contained in the documents incorporated by reference in this prospectus. See "Where You Can Find More Information" below and "Incorporation of Documents by Reference" on page 10. RECENT DEVELOPMENTS We have caused US Bank National Association, as trustee, to call for redemption on February 20, 2001, the redemption date, $50,000,000 of the $181,600,000 in aggregate principal amount outstanding of our 5-3/8% convertible subordinated notes due 2006 at a redemption price of $1,029.90, plus accrued interest from November 15, 2000 to the redemption date of $44.00 for each $1,000 principal amount of the notes. The total redemption price for each $1,000 principal amount of the notes will be $1,044.08. From and after the redemption date, holders of the notes called for redemption that are not converted as described below will be entitled only to the total redemption price, and no further interest will accrue. The notes are convertible into shares of our common stock at a conversion price of $44.00 per share or 22.727 shares for each $1,000 principal amount of the notes. The notes called for redemption may be so converted until the close of business on February 16, 2001, the conversion termination date. We will pay cash in lieu of issuing fractional shares of our common stock. We will not make payments or adjustments on account of any interest accrued on the notes surrendered for conversion. It is possible that we will, in the future, call all or a portion of the remaining notes for redemption, although there can be no assurance as to whether or when we will do so, nor whether any such redemption will be subject to any standby arrangement as described in "Standby Arrangement and Equity Forward Transaction" below. 3 RISK FACTORS We encourage you to consider carefully these risk factors together with all of the information included or incorporated by reference in this prospectus before you decide to purchase shares of our common stock. OUR INDUSTRY IS SUBJECT TO CYCLICALITY, AND A SIGNIFICANT OR PROLONGED DECLINE IN OIL AND GAS PRICES WOULD LIKELY REDUCE THE LEVEL OF EXPLORATION AND DEVELOPMENT OF OFFSHORE AREAS, WHICH WOULD RESULT IN A LOWER DEMAND FOR OUR OFFSHORE MARINE SERVICES AND DRILLING RIGS. Our industry is highly cyclical. Activity in the offshore oil and gas exploration and production industry has a significant impact on our offshore vessel operations and the operations of Chiles Offshore Inc., a drilling rig company in which we hold an approximate 27% equity interest. Factors that affect the level of exploration and development of offshore areas include both short-term and long-term trends in oil and gas prices. In recent years, oil and gas prices have been extremely volatile and, as a result, the level of offshore exploration and drilling activity also has been extremely volatile. Reductions in oil and gas prices generally result in decreased drilling and production and corresponding decreases in demand for our offshore vessel services and Chiles' drilling rigs. Decreased demand for these services and drilling rigs would reduce our revenue and profitability. WE RELY ON SEVERAL CUSTOMERS FOR A SIGNIFICANT SHARE OF OUR REVENUES. THE LOSS OF ANY OF THESE CUSTOMERS COULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING RESULTS. Customers of our offshore marine services are primarily the major oil companies and large independent oil and gas exploration and production companies. The portion of our revenues attributable to any single customer changes over time, depending on the level of relevant activity by the customer, our ability to meet the customer's needs, and other factors, many of which are beyond our control. During 1999, we received approximately 10% of our offshore marine service operating revenues from Chevron Corporation. During 1999, National Response Corporation, our oil spill response service subsidiary, received approximately 25% of its environmental retainer revenue from Coastal Refining and Marketing, Inc. and 13% from Citgo Petroleum Corporation, its two largest customers. WE MAY INCUR SIGNIFICANT COSTS, LIABILITIES AND PENALTIES IN COMPLYING WITH GOVERNMENT REGULATIONS. Government regulation, such as international conventions, federal, state and local laws and regulations in jurisdictions where our vessels operate or are registered, have a significant impact on our offshore marine and environmental response businesses. These regulations relate to worker health and safety, the manning, construction and operation of vessels, oil spills and other aspects of environmental protection. Risks of incurring substantial compliance costs and liabilities and penalties for non-compliance, particularly with respect to environmental laws and regulations, are inherent in our business. If this happens, it could have a substantial negative impact on our profitability and financial position. We cannot predict whether we will incur such costs or penalties in the future. 4 WE FACE INTENSE COMPETITION, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO INCREASE OUR MARKET SHARE AND OUR REVENUES. Our businesses operate in highly competitive industries. High levels of competition could reduce our revenues, increase our expenses and reduce our profitability. In addition to price, service and reputation, important competitive factors for offshore supply fleets include: customers' national flag preference, operating conditions and intended use (all of which determine the suitability of available vessels), complexity of logistical support needs and presence of equipment in the appropriate geographical locations. The important competitive factors in the environmental services business are price, service, reputation, experience and operating capabilities. In addition, we believe that the absence of uniform environmental regulation and enforcement on international, federal, state and local levels has lowered barriers to entry in several market segments and increased the number of competitors. Our oil spill response business faces competition from the Marine Spill Response Corporation (a non-profit corporation funded by the major integrated oil companies), other industry cooperatives and smaller contractors who target specific market niches. In the contract drilling business, customers generally award contracts on a competitive bid basis and contractors can move rigs from areas of low utilization and day rates to areas of greater activity and higher day rates. We believe that, as a result, competition for drilling contracts will continue to be intense for the foreseeable future. Decreases in drilling activity in a major market could depress day rates and could reduce utilization of Chiles' rigs. Substantially all of Chiles' competitors in the business of providing jackup drilling services have substantially larger fleets and are more established as drilling contractors. AN INCREASE IN SUPPLY OF OFFSHORE MARINE VESSELS WOULD LIKELY HAVE A NEGATIVE EFFECT ON THE CHARTER RATES FOR OUR VESSELS, WHICH COULD REDUCE OUR EARNINGS. Expansion of the worldwide offshore marine fleet would increase competition in the markets where we operate. Increased refurbishment of disused or "mothballed" vessels, conversion of vessels from uses other than oil support and related activities or construction of new vessels could all add vessel capacity to current worldwide levels. A significant increase in vessel capacity would lower charter rates and result in a corresponding reduction in our revenues and profitability. MARINE-RELATED RISKS COULD LEAD TO THE DISRUPTION OF OUR OFFSHORE MARINE SERVICES AND TO OUR INCURRENCE OF LIABILITY. The operation of offshore support vessels is subject to various risks, including catastrophic marine disaster, adverse weather and sea conditions, capsizing, grounding, mechanical failure, collision, oil and hazardous substance spills and navigation errors. These risks could endanger the safety of our personnel, vessels, cargo, equipment under tow and other property, as well as the environment. If any of these events were to occur, we could be held liable for resulting damages. In addition, the affected vessels could be removed from service and would not be available to generate revenue. 5 DRILLING-RELATED RISKS COULD LEAD TO THE DISRUPTION OF CHILES' DRILLING SERVICES AND TO ITS INCURRENCE OF LIABILITY. The operation of offshore jackup drilling rigs by Chiles is subject to various risks, including blowouts, craterings, fires, collisions, groundings of drilling equipment and adverse weather and sea conditions. These hazards could damage the environment, cause personal injury or loss of life and damage or destroy the property and equipment involved. In addition, the rigs face many of the marine-related risks associated with our offshore support vessels. If any of these events were to occur, Chiles could incur substantial liability for oil spills, reservoir damage and other accidents. In addition, the affected rigs could be removed from service and would not be available to generate revenue. INSURANCE COVERAGE MAY NOT PROTECT US FROM ALL OF THE LIABILITIES THAT COULD ARISE FROM THE RISKS INHERENT IN OUR BUSINESSES. We maintain insurance coverage against the risks related to our offshore marine and environmental response services. There can be no assurance, however, that our existing insurance coverage can be renewed at commercially reasonable rates or that available coverage will be adequate to cover future claims. If a loss occurs that is partially or completely uninsured, we could be exposed to substantial liability. OUR SIGNIFICANT INTERNATIONAL OPERATIONS ARE SUBJECT TO CURRENCY EXCHANGE RISKS. To minimize the financial impact of currency fluctuations and risks arising from fluctuations in currency exchange rates, we attempt to contract the majority of our services in U.S. dollars. However, in some of our foreign businesses, we collect revenues and pay expenses in local currency. Because we conduct substantially all of our operations in U.S. dollars, if the value of local currencies decline against the U.S. dollar, our operating revenues in these foreign countries would effectively be reduced. We engage in certain currency hedging arrangements designed to minimize the effect of fluctuation in pounds sterling, the currency in the United Kingdom, where most of our currency exchange risk arises. There can be no assurance, however, that we will not incur losses in the future as a result of currency exchange rate fluctuations. MUCH OF OUR OFFSHORE MARINE OPERATIONS ARE CONDUCTED IN FOREIGN COUNTRIES. UNSTABLE POLITICAL, MILITARY AND ECONOMIC CONDITIONS IN THOSE COUNTRIES COULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING RESULTS. During 1999, approximately 39% of our offshore marine revenues were derived from foreign operations. These operations are subject to risks, among other things, of political instability, potential vessel seizure, nationalization of assets, currency restrictions, import-export quotas and other forms of public and governmental regulation, all of which are beyond our control. Economic sanctions or an oil embargo in Nigeria, for example, could have a significant negative impact on activity in the oil and gas industry in offshore West Africa, a region in which we operate vessels. In addition, our offshore support vessel operations in Mexico are significantly affected by Mexican government policy. We cannot predict whether any such conditions or events might develop in the future. 6 AS OUR VESSELS BECOME OLDER, WE MAY NOT BE ABLE TO MAINTAIN OR REPLACE OUR VESSELS. As of September 30, 2000, the average age of vessels we owned, excluding our standby safety vessels, was approximately 14.0 years. We believe that after an offshore supply vessel has been in service for approximately 25 years, the expense (which typically increases with age) necessary to satisfy required marine certification standards may not be economically justifiable. There can be no assurance that we can maintain our fleet by extending the economic life of existing vessels, or that our financial resources will be sufficient to enable us to make expenditures necessary for these purposes or to acquire or build replacement vessels. SPILL RESPONSE REVENUE IS DEPENDENT UPON THE MAGNITUDE AND NUMBER OF SPILL RESPONSES. National Response's spill response revenue can vary greatly between comparable fiscal periods based on the number and magnitude of spill responses in any given period. As a result, our revenue and profitability attributable to this business may vary greatly from period to period. A RELAXATION OF OIL SPILL REGULATION OR ENFORCEMENT COULD REDUCE DEMAND FOR OUR SERVICES. Our environmental response business is dependent upon the enforcement of regulations promulgated under the federal Oil Pollution Act of 1990 and, to a lesser extent, upon state regulations. Less stringent oil spill regulations or less aggressive enforcement of these regulations would decrease demand for National Response's services. We cannot assure you that oil spill regulation will not be relaxed or enforcement of existing or future regulation will not become less stringent. If this happens, the demand for our oil spill response services could be reduced, which could have a negative impact on our profitability. NATIONAL RESPONSE RELIES ON BEING CLASSIFIED AS AN "OIL SPILL REMOVAL ORGANIZATION." A CHANGE IN, OR REVOCATION OF, THIS CLASSIFICATION WOULD RESULT IN A LOSS OF BUSINESS. National Response is a classified Oil Spill Removal Organization, or an "OSRO." OSRO classification is a voluntary process conducted by the United States Coast Guard. The Coast Guard classifies OSROs based on their overall ability to respond to various types and sizes of oil spills in different operating environments, such as rivers/canals, inland waters and oceans. Coast Guard classified OSROs have a competitive advantage over non-classified service providers. Customers of a classified OSRO are exempt from regulations that would otherwise require them to list their oil spill response resources in filings with the Coast Guard. A loss of National Response's classification or changes in the requirements could eliminate or diminish National Response's ability to provide customers with this exemption. If this happens, we could lose customers, in which case our revenues and profitability could be reduced. NATIONAL RESPONSE MAY INCUR LIABILITY IN CONNECTION WITH PROVIDING SPILL RESPONSE SERVICES. Although National Response is generally exempt from liability under the federal Clean Water Act for its own actions and omissions in providing spill response services, this exemption would not apply if National Response is found to have been grossly negligent or to have engaged in willful misconduct, or if National Response fails to provide these services consistent with applicable regulations and directives under the Clean Water Act. In addition, the exemption under the federal Clean Water Act would not protect National Response against liability for personal injury or wrongful death, or against prosecution under other federal or state laws. While most of the U.S. states in which National Response provides service have adopted similar exemptions, several states have 7 not. If a court or other applicable authority determines that National Response does not benefit from federal or state exemptions from liability in providing spill response services, we could be liable together with the local contractor and the responsible party for any resulting damages, including damages caused by others. IF WE DO NOT RESTRICT THE AMOUNT OF FOREIGN OWNERSHIP OF OUR COMMON STOCK, WE COULD BE PROHIBITED FROM OPERATING OUR VESSELS IN PARTS OF THE U.S., WHICH WOULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING RESULTS. We are subject to the Shipping Act, 1916 and the Merchant Marine Act of 1920. These Acts govern, among other things, the ownership and operation of vessels used to carry cargo between U.S. ports. The Acts require that vessels engaged in the "U.S. coastwise trade" be owned by U.S. citizens and built in the United States. For a corporation engaged in the U.S. coastwise trade to be deemed a citizen of the U.S.: o the corporation must be organized under the laws of the U.S. or of a state, territory or possession thereof, o each of the chief executive officer and the chairman of the board of directors must be a U.S. citizen (and no officer who is not a U.S. citizen may act in such person's absence), o no more than a minority of the number of directors of such corporation necessary to constitute a quorum for the transaction of business can be non-U.S. citizens and o at least 75% of the interest in such corporation must be owned by U.S. "citizens" (as defined in the Acts). We would be prohibited from operating our vessels in the U.S. coastwise trade during any period in which we did not comply with these regulations. To facilitate compliance, our certificate of incorporation: o limits ownership by foreigners of any class of our capital stock (including our common stock) to 22.5%, so that foreign ownership will not exceed the 25.0% permitted. Under certain circumstances our board of directors may increase this percentage to 24.0%, o requires a stock certification system with two types of certificates to aid tracking of ownership, and o permits our board of directors to make such determinations to ascertain ownership and implement such limitations as reasonably may be necessary. 8 FORWARD-LOOKING STATEMENTS Certain statements contained or incorporated by reference in this prospectus, including without limitation, statements containing the words "believes," "anticipates," "hopes," "intends," "expects," "will," "plans," and other similar words may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including those described in the section entitled "Risk Factors," that may cause our actual results to differ materially from expectations. Given these uncertainties, prospective investors are cautioned not to place undue reliance on those forward-looking statements. We disclaim any obligation to update or to publicly announce any updates or revisions to any of the forward-looking statements contained or incorporated by reference in this prospectus to reflect any change in our expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying the statements. 9 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission ("SEC"). Copies of these reports, proxy statements and other information may be read and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may request copies of these documents by writing to the SEC and paying a fee for the copying costs. You may also call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our SEC filings are also available to the public from the SEC's web site at http://www.sec.gov. Our common stock is traded on the New York Stock Exchange and you may inspect the reports, proxy statements and other information we file with the New York Stock Exchange at its offices located at 20 Broad Street, New York, New York 10005. INCORPORATION OF DOCUMENTS BY REFERENCE The SEC allows us to "incorporate by reference" certain of our publicly filed documents into this prospectus, which means that we may disclose material information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus and any later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any additional documents we file with the SEC under Sections 13(a) or 14 of the Securities Exchange Act of 1934 until the offering of the common stock is terminated. This prospectus is part of a registration statement on Form S-3 that we filed with the SEC and does not contain all of the information set forth in the registration statement. The following documents that we previously filed with the SEC are incorporated by reference: (1) our Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (as amended on Form 10-K/A filed on April 6, 2000); (2) our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2000, June 30, 2000 and September 30, 2000, filed on May 15, 2000, August 14, 2000 and November 14, 2000, respectively; (3) our Current Reports on Form 8-K filed on June 16, 2000 and January 18, 2001; and (4) the description of our common stock contained in our registration statements on Form 8-A filed on November 30, 1992 and October 9, 1996, including any amendment or report filed for the purposes of updating such description. We will provide any person to whom a copy of this prospectus is delivered, on written or oral request, a copy of any or all of the documents incorporated by reference, other than exhibits to those documents unless specifically incorporated by reference. You should direct any requests for documents to SEACOR SMIT Inc., 1370 Avenue of the Americas, 25th Floor, New York, New York 10019, Attention: Corporate Secretary. 10 USE OF PROCEEDS We will use the net proceeds, if any, we receive from the sale of our common stock under the standby arrangement to pay the redemption price for up to $50,000,000 face amount of any 5-3/8% convertible subordinated notes due 2006 not surrendered for conversion. We will use any other amounts we receive under the equity forward arrangement described in "Standby Arrangement and Equity Forward Transaction" below for general corporate purposes. The total amount of the proceeds, if any, we will receive in connection with the standby arrangement and equity forward transaction cannot be determined at this time. We will not receive any cash proceeds from the issuance of our common stock upon the conversion of the 5-3/8% convertible subordinated notes due 2006 called for redemption. STANDBY ARRANGEMENT AND EQUITY FORWARD TRANSACTION Under a standby purchase agreement, Credit Suisse First Boston Corporation ("CSFB") has agreed, subject to several conditions, to purchase from us, at a purchase price of $45.94 per share, the number of shares of our common stock necessary to provide us with the proceeds to pay the aggregate total redemption price of up to $50,000,000 face amount of the notes we will redeem on the redemption date, which will not exceed 1,136,365 shares of our common stock. CSFB is obligated to take and pay for all of the shares of common stock which it has agreed to purchase under the standby purchase agreement if any shares are taken. The number of shares CSFB will purchase from us will be determined by the aggregate total redemption price of the notes called for redemption that are not converted into shares of our common stock. The standby purchase agreement provides that the obligation of CSFB to pay for and accept delivery of any shares of common stock are subject to the approval of certain legal matters by their counsel and to certain other conditions, including effectiveness of the equity forward transaction. This prospectus covers the issuance of any shares CSFB purchases under the standby purchase agreement and the reoffering of those shares by CSFB to the public. As compensation to CSFB for its commitment under the standby purchase agreement, we will pay to CSFB: o a standby fee of $300,000; and o an amount per share equal to $0.04 for each share of our common stock CSFB purchases from us under the standby purchase agreement. We have agreed to indemnify CSFB against a number of liabilities, including liabilities under the Securities Act of 1933, as amended. We have also entered into an equity forward transaction with Credit Suisse First Boston International ("CSFBi"), an affiliate of CSFB, with respect to any shares of our common stock that CSFB purchases from us under the standby purchase agreement. The equity forward transaction will be governed by an ISDA master agreement, including a schedule and a confirmation containing the specific terms and conditions of the equity forward transaction. A copy of the ISDA master agreement, the schedule and the confirmation has been filed as an exhibit to the registration statement of which this prospectus forms a part, and reference is made to the exhibit for the complete terms of the equity forward transaction. 11 The equity forward transaction provides that at maturity, which will occur twelve months following the purchase by CSFB of shares of our common stock under the standby purchase agreement, we will elect to either purchase the shares covered by the equity forward transaction from CSFBi at a purchase price described below, or cash settle the transaction as described below. If we elect to purchase the shares from CSFBi, we will pay a purchase price equal to $45.94 (the purchase price under the standby purchase agreement) plus interest calculated at LIBOR plus 115 basis points, from the date that CSFB purchases those shares from us to the date that we purchase those shares from CSFBi. If we elect to cash settle the transaction, then if the value of the shares at maturity (determined on the basis of the net proceeds that CSFB is able to receive upon the sale of those shares in the open market pursuant to this prospectus) exceeds the purchase price described above, then CSFBi will pay to us the amount of such excess in cash at maturity. If the purchase price exceeds the value of the shares at maturity, then we will pay to CSFBi the amount of such excess in cash at maturity. In addition, CSFBi will pay to us at maturity the amount of any dividends paid on the shares covered by the equity forward transaction during the term of the transaction, although we do not currently expect to pay any dividends on any shares of our common stock during the term of the equity forward transaction. We will have the right to accelerate the maturity of the equity forward transaction in whole or in part at any time upon prior written notice to CSFBi. The equity forward transaction also contains customary events of default and termination events following which either one or both parties would have the right to terminate the transaction and make net cash payments based on the net value of the transaction at the time of termination. As a result of the equity forward transaction, we will remain economically exposed to changes in the market value of the shares of our common stock covered by the transaction, as if we owned those shares ourselves. PLAN OF DISTRIBUTION For a description of the standby purchase agreement see "Standby Arrangement and Equity Forward Transaction." Under the standby purchase agreement, CSFB may offer to the public any shares of our common stock it acquires at prices set by CSFB from time to time. CSFB may also make sales to dealers at prices that represent concessions from the prices at which such shares are then being offered to the public. CSFB will determine from time to time the amount of such concessions. CSFB may offer from time to time such shares of common stock on the New York Stock Exchange. Any common stock so offered by CSFB will be subject to receipt and acceptance by it and subject to its right to reject orders in whole or in part. In order to facilitate the offering of the common stock, CSFB may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, CSFB may bid for, and purchase, shares of common stock in the open market. Finally, CSFB may reclaim concessions allowed to a dealer for distributing shares of common stock if CSFB repurchases previously distributed common stock in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of common stock above independent market levels. CSFB is not required to engage in these activities, and may end any of these activities at any time. From time to time CSFB has provided and continues to provide investment banking services to us for which they have received customary fees and commissions. 12 LEGAL MATTERS The validity of the shares of common stock has been passed upon for us by Weil, Gotshal & Manges LLP. Davis Polk & Wardwell will pass on certain legal matters for CSFB. EXPERTS The financial statements and schedule incorporated by reference in this prospectus from our Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (as amended on Form 10-K/A filed on April 6, 2000) have been audited by Arthur Andersen LLP, independent public accountants, as stated in their reports with respect thereto, which are incorporated herein by reference, and have been so incorporated herein in reliance upon the authority of such firm as experts in accounting and auditing in giving said reports. 13 1,136,365 Shares [SEACOR logo] Common Stock PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following table sets forth the various costs and expenses payable by the Registrant in connection with the sale of the shares being registered hereby (all of which are estimates other than the SEC registration fee): SEC registration fee.........................................$14,844 NYSE application fee..........................................14,750* Printing and engraving expenses................................3,000 Legal fees and expenses.......................................20,000 Accounting fees and expenses...................................5,000 Miscellaneous..................................................2,000 ------ Total...............................................$53,294 ====== *Assumes issuance of maximum amount hereunder. Item 15. Indemnification and Limitation of Liability of Directors and Officers. As more fully described below, Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") permits Delaware corporations to indemnify each of their present and former directors or officers under certain circumstances, provided that such persons acted in good faith and in a manner which they reasonably believed to be in, or not opposed to, the best interests of the corporation. Article III of our Amended and Restated By-laws provides that we will indemnify, to the fullest extent permitted by Section 145 of the DGCL, as the same may be amended from time to time, all persons whom we may indemnify pursuant thereto and in the manner prescribed thereby. Specifically, Section 145 of the DGCL provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. Section 145 of the DGCL also provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Any such indemnification (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth above. Section 145 of the DGCL permits a Delaware corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability. Section 102(b) of the DGCL enables a Delaware corporation to include a provision in its certificate of incorporation eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Our certificate of incorporation contains provisions that limit the personal liability of each of our directors to us and our stockholders for monetary damages for breach of fiduciary duty as a director. These provisions eliminate personal liability to the fullest extent permitted by the DGCL. ii Item 16. Exhibits. Number Description ------ ----------- 1.1 Form of Standby Purchase Agreement between SEACOR SMIT Inc. and Credit Suisse First Boston Corporation. 1.2 Form of ISDA Master Agreement between SEACOR SMIT Inc. and Credit Suisse First Boston Corporation, with attached Schedule and Confirmation. 3.1 Restated Certificate of Incorporation of SEACOR SMIT Inc. (incorporated herein by reference to Exhibit 3.1(a) to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997, and filed with the SEC on August 14, 1997). 3.2 Certificate of Amendment to the Restated Certificate of Incorporation of SEACOR SMIT Inc. (incorporated herein by reference to Exhibit 3.1(b) to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997, and filed with the SEC on August 14, 1997). 3.3 Amended and Restated By-laws of SEACOR Holdings, Inc. (incorporated herein by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 (No. 333-12637) of SEACOR Holdings, Inc. filed with the SEC on September 25, 1996). 4.1 Form of Common Stock Certificate (incorporated herein by reference to the Registration Statement on Form S-1 (No. 333-53744) of SEACOR Holdings, Inc. filed with the SEC on October 26, 1992, as amended). 5.1 Opinion of Weil, Gotshal & Manges LLP 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Weil, Gotshal & Manges LLP (included as part of Exhibit 5.1) 24.1 Power of Attorney (included on signature page to the Registration Statement) Item 17. Undertakings. (1) The undersigned registrant hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: iii (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering. (2) 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 Exchange Act 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. (3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions in Item 15 above, 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 of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the iv Securities Act of 1933 and will be governed by the final adjudication of such issue. v SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant 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 York, State of New York, on January 17, 2001. SEACOR SMIT INC. By: /s/ Randall Blank --------------------------------------- Randall Blank Executive Vice President, Chief Financial Officer and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles Fabrikant, Randall Blank and Dick Fagerstal, or either of them, his attorney-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments (including all post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by this registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signatures Title Date - ---------- ----- ---- /s/ Charles Fabrikant Chairman of the Board of January 17, 2001 - ----------------------------------- Directors, President and Charles Fabrikant Chief Executive Officer (Principal Executive Officer) /s/ Randall Blank Executive Vice President, Chief January 17, 2001 - ------------------------------------ Financial Officer and Secretary Randall Blank (Principal Financial Officer ) vi /s/ Lenny P. Dantin Vice President January 17, 2001 - ----------------------------------- (Principal Accounting Officer Lenny P. Dantin and Controller) /s/ Granville E. Conway Director January 17, 2001 - ----------------------------------- Granville E. Conway /s/ Pierre de Demandolx Director January 17, 2001 - ----------------------------------- Pierre de Demandolx /s/ Richard M. Fairbanks III Director January 17, 2001 - ----------------------------------- Richard M. Fairbanks III /s/ Michael E. Gellert Director January 17, 2001 - ----------------------------------- Michael E. Gellert /s/ John Hadjipateras Director January 17, 2001 - ----------------------------------- John Hadjipateras /s/ Antoon Kienhuis Director January 17, 2001 - ----------------------------------- Antoon Kienhuis /s/ Andrew R. Morse Director January 17, 2001 - ----------------------------------- Andrew R. Morse /s/ Stephen Stamas Director January 17, 2001 - ----------------------------------- Stephen Stamas
vii EXHIBIT INDEX Number Description 1.1 Form of Standby Purchase Agreement between SEACOR SMIT Inc. and Credit Suisse First Boston Corporation. 1.2 Form of ISDA Master Agreement between SEACOR SMIT Inc. and Credit Suisse First Boston Corporation, with attached Schedule and Confirmation. 5.1 Opinion of Weil, Gotshal & Manges LLP 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Weil, Gotshal & Manges LLP (included as part of Exhibit 5.1) 24.1 Power of Attorney (included on signature page to the Registration Statement) viii EX-1 2 0002.txt 1.1 Exhibit 1.1 ----------- 1,136,365 SEACOR SMIT INC. COMMON STOCK, PAR VALUE $0.01 PER SHARE STANDBY AGREEMENT January __, 2001 CREDIT SUISSE FIRST BOSTON CORPORATION Eleven Madison Avenue, New York, N.Y. 10010-3629 Dear Sirs: 1. Introductory. SEACOR SMIT INC., a Delaware corporation (the "Company"), proposes to redeem $50,000,000 aggregate principal amount of its outstanding 53/8% Convertible Subordinated Notes due November 15, 2006 (the "Convertible Securities") and, in that connection, agrees with Credit Suisse First Boston Corporation (the "Purchaser") as follows: 2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the Purchaser that: (a) A registration statement (No. 333-_________), including a form of prospectus, relating to the common stock, par value $0.01 per share, of the Company (the "Common Stock") issuable as Purchased Shares (as hereinafter defined) in accordance with the provisions of Section 3(a) hereof has been filed with the Securities and Exchange Commission (the "Commission") and has been declared effective under the Securities Act of 1933 (the "Act"). For purposes of this Agreement, "Effective Time" means, the date and time as of which such registration statement was declared effective by the Commission. "Effective Date" means the date of the Effective Time. Such registration statement, as amended at the Effective Time including all material incorporated by reference therein, is hereinafter referred to as the "Registration Statement", and the form of prospectus relating to the Purchased Shares, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as included in the Registration Statement, including all material incorporated by reference in such prospectus, is hereinafter referred to as the "Prospectus". No document has been or will be prepared or distributed in reliance on Rule 434 under the Act. (b) On the Effective Date, the Registration Statement conforms, and at the time of any filing of the Prospectus pursuant to Rule 424(b), the Registration Statement and the Prospectus will conform, in all respects to the requirements of the Act and the rules and regulations of the Commission ("Rules and Regulations"), and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The preceding sentence does not apply to statements in or omissions from the Registration Statement or Prospectus based upon written information furnished to the Company by the Purchaser specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b). (c) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, except where the failure to be so qualified would not have a material adverse effect on the general affairs, prospects, management, financial position, stockholders' equity or result of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"); and each subsidiary listed on Exhibit A hereto (each a "Subsidiary") of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation. (d) All of the outstanding shares of capital stock of the Company have been validly authorized and issued, are fully paid and non-assessable and conform in all material respects to the description of the capital stock of the Company incorporated by reference in the Prospectus; and all of the outstanding shares of capital stock of each Subsidiary of the Company have been validly authorized and issued, are fully paid and non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. (e) As of the close of business on January __, 2001, $181,600,000 principal amount of Convertible Securities were outstanding, and the Company has duly authorized the redemption of up to all of the outstanding Convertible Securities on February __, 2001 (the "Redemption Date"), at the redemption price of 102.99% of the principal amount thereof plus accrued and unpaid interest thereon to the Redemption Date, or a total of $[ ] per $1,000 principal amount; and the Convertible Securities are convertible into 22.727 shares of Common Stock per $1,000 principal amount of the Convertible Securities, by surrender of the Convertible Securities to U.S. Bank Trust National Association (the "Agent"), through The Depositary Trust Company in accordance with its established procedures, prior to the close of business on February __, 2001 (the "Expiration Date"); (f) The Purchased Shares have been validly authorized and when delivered and paid for in accordance with this Agreement will be validly issued, fully paid and non-assessable and will conform in all material respects to the description of the capital stock of the Company incorporated by reference in the Prospectus and the stockholders of the Company will have no preemptive rights with respect to the Purchased Shares. (g) There are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or the Purchaser for a brokerage commission, finder's fee or other like payment as a result of the offering of the Purchased Shares. (h) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities with the securities registered pursuant to the Registration Statement or 2 with any securities being registered pursuant to any other registration statement filed by the Company under the Act, except for the Stockholders Agreement filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (the "Stockholders Agreement"). The Company has obtained a valid waiver of its rights under the Stockholders Agreement from each affiliate of the Company that is a party thereto. (i) The execution, delivery and performance of this Agreement, the compliance by the Company with all of the provisions hereof and the consummation by the Company of the transactions herein contemplated will not conflict with nor result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, stockholders' agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation or Amended By-laws of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any of their properties; and no consent, approval, authorization, order, filing, registration or qualification of or with any such court or governmental agency or body is required for the issuance of the Purchased Shares by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except the registration under the Act of the Purchased Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Purchased Shares by the Purchaser. The Company has full power and authority to authorize and issue the Purchased Shares as contemplated by this Agreement. (j) This Agreement has been duly authorized, executed and delivered by the Company. (k) Except as disclosed in the Prospectus and except as would not be reasonably likely to have a Material Adverse Effect, the Company and its Subsidiaries have good title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Prospectus, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exception that would materially interfere with the use made or to be made thereof by them. (l) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, "intellectual property rights") necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect. (m) Except as disclosed in the Prospectus, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "environmental laws"), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site 3 disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect on the Company and its subsidiaries taken as a whole; and the Company is not aware of any pending investigation which might lead to such a claim. (n) Except as disclosed in the Prospectus, there are no legal or governmental proceedings pending to which the Company, or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement, or which are otherwise material in the context of the issuance and resale of the Purchased Shares; and to the best of the Company's knowledge, no such proceedings are threatened by governmental authorities or threatened by others. (o) The financial statements incorporated by reference in the Registration Statement and Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; and the schedule incorporated by reference in the Registration Statement presents fairly the information required to be stated therein. (p) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus and, except as disclosed in or contemplated by the Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (q) The Company is not and, upon the issuance of the Purchased Shares and the application of the proceeds therefrom as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940. (r) The Company is a citizen of the United States within the meaning of Section 2 of the Shipping Act of 1916, as amended (the "Shipping Act") and is qualified to engage in the coastwise trade of the United States; the issue and sale of the Purchased Shares by the Company and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not cause the Company to cease to be a citizen of the United States within the meaning of Section 2 of the Shipping Act or cause the Company to cease to be qualified to engage in the coastwise trade of the United States. 4 (s) The Company and its subsidiaries hold all licenses, consents and approvals required by, and are in compliance with, all regulations of state, Federal and foreign governmental authorities that regulate the conduct of the business of the Company and its subsidiaries, except where the failure to hold any such license, consent or approval or to be in compliance with any such regulation would not have a Material Adverse Effect. (t) National Response Corporation ("NRC") has been designated an Oil Spill Removal Organization by the U.S. Coast Guard pursuant to the Oil Pollution Act of 1990. 3. Agreement to Sell and Purchase. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Purchaser agrees that: (a) The Purchaser will purchase from the Company at $[___] per share (the "Purchase Price") the number of shares of Common Stock necessary to provide the Company with the funds required to pay the aggregate redemption price of up to $50,000,000 principal amount of the $50,000,000 total principal amount of the Convertible Securities called for redemption that remain outstanding on the Redemption Date (the "Purchased Shares"). The Purchaser shall pay the Company for the Purchased Shares in same day funds on February __, 2001 (the "Closing Date"). (b) As compensation to the Purchaser for its commitment hereunder, the Company will pay to the Purchaser, in same day funds, (i) at the Execution Time, a standby fee of $[___], and (ii) on the Closing Date, an amount equal to $[___] per Purchased Share. "Execution Time" shall mean the date and time this Agreement is executed and delivered by the parties hereto. (c) At the Execution Time, the Purchaser and the Company will enter into an equity forward transaction (the "Equity Forward") in substantially the form attached hereto as Exhibit A. (d) The Purchaser agrees to notify the Company when all Purchased Shares have been sold or if any offering of Purchased Shares is otherwise terminated. (e) the Purchaser agrees that it has not solicited and will not solicit conversion of the Convertible Securities. 4. Offering by Purchaser. It is understood that the Purchaser proposes to offer the Purchased Shares for sale to the public as set forth in the Prospectus. 5. Certain Agreements of the Company. The Company agrees with the Purchaser that: (a) If required, the Company will file the Prospectus with the Commission pursuant to and in accordance with subparagraph (1) or (2) (as consented to by the Purchaser, which consent will not be unreasonably withheld) of Rule 424(b) not later than the second business day following the execution and delivery of this Agreement (or, if applicable and if consented to by the Purchaser, which consent will not be unreasonably withheld, subparagraph (4) or (5)). The Company will advise the Purchaser promptly of any such filing pursuant to Rule 424(b). (b) The Company will advise the Purchaser promptly of any proposal to amend or supplement the registration statement as filed, or the related prospectus or the Registration Statement or the Prospectus and will not effect such amendment or supplementation without the Purchaser's consent, which consent will not be unreasonably withheld; and the Company will also advise the Purchaser 5 promptly of any amendment or supplementation of the Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement and will use reasonably its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (c) If, at any time during the period when a prospectus relating to the Purchased Shares is required to be delivered under the Act in connection with sales by the Purchaser or dealer, which shall in no event end earlier (but may end later) than the final Settlement Date (as defined in the Equity Forward) under the Equity Forward, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Company will promptly notify the Purchaser of such event and will promptly prepare and file with the Commission, at its own expense, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. (d) As soon as practicable, the Company will make generally available to its security holders an earnings statement covering a period of at least 12 months beginning after the Effective Date which will satisfy the provisions of Section 11(a) of the Act. (e) The Company will furnish to the Purchaser copies of the Registration Statement, (2 of which will be signed and will include all exhibits), and, during the period referred to in paragraph (c) above, the Prospectus, and all amendments and supplements to such documents, in each case in such quantities as the Purchaser requests. The Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the business day following the Execution Time. All other such documents shall be so furnished as soon as available. The Company will pay the expenses of printing and distributing to the Purchaser all such documents. (f) The Company will arrange for the qualification of the Purchased Shares for sale under the laws of such jurisdictions as the Purchaser reasonably designates and will continue such qualifications in effect so long as required for the distribution of the Purchased Shares; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation other than as to matters and transactions relating to the Prospectus or the Registration Statement or the offering or sale of the Purchased Shares, in any jurisdiction in which it is not now so subject. (g) The Company will commence on or prior to the date hereof (the "Mailing Date") the mailing of the required notice of the redemption of the Convertible Securities on the Redemption Date in the form submitted to the Purchaser and will furnish to the Purchaser copies thereof in such quantities as it requests. (h) The Company will direct the Agent to advise the Purchaser's Transactions Advisory Group daily by telephone confirmed by facsimile of the principal amount of Convertible Securities surrendered for conversion into shares of Common Stock on the preceding day and the principal amount of Convertible Securities tendered to and accepted by the Agent for redemption. (i) The Company will pay all expenses incident to the performance of its obligations under this Agreement, the charges of the Agent, any filing fees and other expenses (including fees and 6 disbursements of counsel) incurred in connection with qualification of the Purchased Shares for sale under the laws of such jurisdictions as the Purchaser designates and the printing of memoranda relating thereto, and expenses incurred in distributing the Prospectus (including any amendments and supplements thereto) to the Purchaser. (k) The Company will arrange for the listing of the Purchased Shares on the New York Stock Exchange, subject to notice of issuance, prior to the Redemption Date. 6. Conditions of the Obligations of the Purchaser. The obligations of the Purchaser hereunder will be subject to the accuracy of the representations and warranties on the part of the Company contained herein, to the accuracy of the statements of Company officers made in any certificate pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent: (a) On the Closing Date, the Purchaser shall have received a letter (the "Initial Comfort Letter"), dated the date of delivery thereof, of Arthur Andersen LLP confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating that: (i) in their opinion the financial statements and schedules examined by them and included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations; (ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 71, Interim Financial Information, on the unaudited financial statements included in the Registration Statement; (iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that: (A) the unaudited financial statements included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles; (B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock or any increase in short-term indebtedness or long-term debt of the Company and its consolidated subsidiaries or, at the date of the latest available balance sheet read by such accountants, there was any decrease in consolidated net current assets or net assets, as compared with amounts shown on the latest balance sheet included in the Prospectus; or 7 (C) for the period from the closing date of the latest income statement included in the Prospectus to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year and with the period of corresponding length ended the date of the latest income statement included in the Prospectus, in consolidated net sales or net operating income, or in the total or per share amounts of consolidated net income; except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (iv) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Registration Statement (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter. All financial statements and schedules included in material incorporated by reference into the Prospectus shall be deemed included in the Registration Statement for purposes of this subsection. (b) The Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement. Prior to the close of business on the final Settlement Date under the Equity Forward, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for the purpose shall have been instituted or, to the knowledge of the Company or the Purchaser, shall be contemplated by the Commission. (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company or its subsidiaries which, in the judgment of the Purchaser, is material and adverse and makes it impractical or inadvisable to proceed with completion of the purchase of and payment for the Purchased Shares or the resale of the Purchased Shares, (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by U.S. Federal or New York authorities; or (v) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of the Purchaser, the effect of any such outbreak, escalation, declaration, calamity or 8 emergency makes it impractical or inadvisable to proceed with the purchase of and payment for the Purchased Shares or the resale of such shares. (d) On, the Closing Date, the Purchaser shall have received an opinion, dated the date of delivery thereof, of Weil, Gotshal & Manges LLP*, counsel for the Company, to the effect that: (i) Each of the Company and its Subsidiaries is validly existing as a corporation or limited liability company, as the case may be, in good standing under the laws of its state of organization, with full power and authority to own its properties and conduct its business as described in the Prospectus; and each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation or limited liability company, as the case may be, and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business, except where the failure to have such qualification would not have a Material Adverse Effect; (ii) All the outstanding shares of capital stock, or limited liability company interests, as the case may be, of each Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable, and are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the knowledge of such counsel, after due inquiry, any other security interests, claims, liens or encumbrances; (iii) The redemption of $75,000,000 in aggregate principal amount of the outstanding Convertible Securities on the Redemption Date has been duly authorized and such Convertible Securities have been duly called for redemption on the Redemption Date; (iv) The Company's authorized equity capitalization is as set forth in the Prospectus; the capital stock of the Company conforms to the description thereof incorporated by reference in the Prospectus; the outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and non-assessable; the Purchased Shares being sold hereunder by the Company have been duly and validly authorized, and, when issued and delivered to and paid for by the Purchaser pursuant to this Agreement on the Closing Date, will be fully paid and non-assessable; the Purchased Shares being sold hereunder by the Company are duly authorized for listing, subject to official notice of issuance, on the New York Stock Exchange; the certificates for the Purchased Shares are in valid and sufficient form; and the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Purchased Shares; (v) Except for the parties to the Amended and Restated Stockholders' Agreement filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999, no holders of securities of the Company have rights (to the registration of such securities under the Registration Statement or pursuant to the terms of any agreement to which the Company is a party, of which such counsel is aware; - ---------------------------- * Such counsel may retain local counsel reasonably satisfactory to the Purchaser to render certain portions of the opinions relating to the Subsidiaries. 9 (vi) The Company is not and, after giving effect to the offering and sale of the Purchased Shares and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940; (vii) No consent, approval, authorization or order of, or filing with, any court or governmental agency or body is required for the consummation of the transactions contemplated herein, except such as have been obtained under the Act and such as may be required under the blue sky laws of any jurisdiction (and maritime, admiralty and related laws, rules and regulations, as to which such counsel need express no opinion) in connection with the purchase and the resale of the Purchased Shares by the Purchaser and such other approvals (specified in such opinion) as have been obtained; (viii) Neither the execution, delivery and performance of this Agreement, nor the issuance and sale of the Purchased Shares, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or constitute a default under any law (other than maritime, admiralty and related laws, rules and regulations, as to which such counsel need express no opinion) or the charter or by-laws of the Company or the terms of any indenture or other agreement or instrument known to such counsel and to which the Company or any of its Subsidiaries is a party or bound or any judgment, order or decree known to such counsel to be applicable to the Company or any of its Subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or any of its Subsidiaries (other than public or governmental authorities having jurisdiction over maritime, admiralty or related matters or who enforce or interpret maritime or admiralty laws or promulgate any regulations as to such matters); and the Company has full power and authority to authorize, issue and sell the Purchased Shares as contemplated by this Agreement; (ix) This Agreement has been duly authorized, executed and delivered by the Company. (x) To the knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries of a character required to be disclosed in the Registration Statement which is not adequately disclosed or incorporated by reference in the Prospectus, and there is no franchise, contract or other document of a character required to be described or incorporated by reference in the Registration Statement or Prospectus, or to be filed as an exhibit, which is not described or filed as required; (xi) The Company has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement; the 10 execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company; (xii) The Registration Statement has become effective under the Act; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened; and each Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company (other than the financial statements and related schedules therein, as to which such counsel need express no view), and the documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be (other than the financial statements and related schedules therein, as to which such counsel need express no view), appeared on their face to be appropriately responsive in all material respects to the requirements of the Act and the rules and regulations thereunder; and although such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, such counsel's work in connection with this matter did not disclose any information that gave him reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company (other than, in each case, the financial statements and related statements and related schedules therein, as to which such counsel need express no view), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statement therein not misleading or that, as of its date, the Prospectus or any further amendment or supplement thereto made by the Company (other than the financial statements and related schedules therein, as to which such counsel need express no view) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, either the Registration Statement or the Prospectus or any further amendment or supplement thereto made by the Company (other than the financial statements and related schedules therein, as to which such counsel need express no view) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (xiii) The descriptions in the Registration Statement and Prospectus of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any contracts or documents of a character required to be described in a Registration Statement or the Prospectus or to be filed as exhibits to a Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Registration Statements or the Prospectus. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the District of Columbia or the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Purchaser and (B) as to matters of fact, to the extent they deem proper, on certificates of 11 responsible officers of the Company and public officials. References to the Prospectus in this paragraph (d) include any supplements. For purposes of the opinions rendered under this Section 6(d), the term Subsidiaries shall include only the Subsidiaries organized in the United States. (e) On the Closing Date, the Company shall have furnished to the Purchaser the opinion of Alice N. Gran, General Counsel of the Company, dated the date of delivery thereof, to the effect that: (i) the issue and sale of the shares of Common Stock being delivered by the Company and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not conflict with, or violate or constitute a default under, (i) any U.S. Federal maritime or admiralty law or regulation, or (ii) any judgment, writ, injunction, decree or order binding on the Company or any of its subsidiaries of which such counsel is aware of any U.S. Federal court or governmental authority having jurisdiction over any maritime or admiralty matters or who enforce or interpret any maritime or admiralty laws or promulgate any regulations as to such matters; (ii) no consent, approval, waiver, license or other authorization by or filing with any U.S. Federal maritime or admiralty governmental authority is required for the issue and sale of the Purchased Shares by the Company or the consummation by the Company of the transactions contemplated herein; (iii) immediately prior to the date of delivery thereof the Company was a citizen of the United States within the meaning of Section 2 of the Shipping Act and was qualified to operate vessels in the coastwise trade of the United States; immediately following the issue and sale of the Purchased Shares by the Company and the compliance by the Company and the Purchaser with all of the provisions of this Agreement and the consummations of the transactions herein contemplated (and assuming that at least [___%] of the shares are issued and sold to, and held of record and beneficially owned by, persons who are citizens of the United States), the Company will remain a citizen of the United States within the meaning of Section 2 of the Shipping Act and will continue to be qualified to operate vessels in the coastwise trade of the United States; (iv) the statements in the Prospectus under the caption "Risk Factors--If we do not restrict the amount of foreign ownership of our common stock, we could be prohibited from operating our vessels in parts of the U.S., which would adversely affect our business and operating results" fairly present and summarize the maritime laws and regulations referred to therein and the statements in the Form 10-K incorporated by reference in the Prospectus under the captions "Business--Offshore Marine Services--Government Regulations--Domestic Regulation" and "--Foreign Regulation" fairly identify the domestic governmental and international maritime regulation to which the Company is subject; and (f) The Purchaser shall have received from Davis Polk & Wardwell, counsel for the Purchaser, on the Closing Date and on the first day of any Sale Period under the Equity Forward, such opinion or opinions, dated the date of delivery thereof, with respect to the validity of the Purchased Shares delivered on the Closing Date, the Registration Statement, the Prospectus and other related matters as the Purchaser may require, and the Company shall have furnished to 12 such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (g) On the Closing Date, the Purchaser shall have received a certificate, dated the date of delivery thereof, of the President or any Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the date of delivery thereof, that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission and that, subsequent to the date of the most recent financial statements in the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Prospectus or as described in such certificate. (h) The Equity Forward shall be in full force and effect. (i) On each Bring Down Date (as defined below), and as a condition to the ability of the Company to elect Net Cash Settlement under the Equity Forward, (i) the Purchaser shall have received a letter (each a "Bring -Down Comfort Letter" and each, together with the Initial Comfort Letter, a "Comfort Letter"), dated the date of delivery thereof, of Arthur Andersen LLP confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and (A) stating that, as of such Bring-Down Date (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is included in the Prospectus, as of a date not more than three Business Days prior to such Bring-Down Date), the conclusions and findings of such accountants with respect to the financial information and other matters covered by the Initial Comfort Letter and any intervening Bring-Down Comfort Letter are accurate, and confirming in all material respects the conclusions and findings set forth in the Initial Comfort Letter or any intervening Bring-Down Comfort Letter and (B) with respect to any revised or additional financial information included in the Prospectus as a result of the filing of a post-effective amendment to the Registration Statement or of reports under the Exchange Act on Form 10-K, Form 10-Q or Form 8-K if financial statements are filed therewith, complying with the requirements of paragraph (a) of Section 6 of this Agreement. (ii) the Purchaser shall have received an opinion dated the date of delivery thereof, of Weil, Gotshal & Manges LLP, counsel to the Company, as is reasonably acceptable to the Purchaser, affirming as of such date the opinions required under clauses (i) solely with respect to the Company, (iv), (vi), (vii), (viii), (x), (xi), (xii) and (xiii) of paragraph (d) of Section 6 of this Agreement; (iii) the Purchaser shall have received an opinion, dated the date of delivery thereof, of Alice N. Gran, General Counsel of the Company, affirming as of such date the opinions required under clauses (i), (ii), (iii) and (iv) of paragraph (e) of Section 6 of this Agreement; and 13 (iv) the Purchaser shall have received an opinion, dated the date of the delivery thereof, of Davis Polk & Wardwell, counsel to the Purchaser, affirming as of such date the opinions required under paragraph (f) of this Agreement. "Bring-Down Date" means the first day of any Sale Period (as defined in the Equity Forward) if (i) the Company has filed a post-effective amendment to the Registration Statement or any reports under the Exchange Act on Form 10-K, Form 10-Q or Form 8-K if financial statements are filed therewith since the later of the Closing Date and the most recent Bring-Down Date or (ii) the Company has elected Net Cash Settlement (as defined in the Equity Forward) with respect to Purchased Shares in an aggregate cumulative amount since delivery of the most recent Comfort Letter equal to or greater than $10,000,000 or (iii) 30 days have elapsed since the last Bring-Down Date. (j) On the first day of any Sale Period, and as a condition to the ability of the Company to elect Net Cash Settlement under the Equity Forward, (i) the Purchaser shall have received a certificate, dated the date of delivery thereof, that complies with the requirements of paragraph (g), of this Agreement; and (ii) the Company shall have made available its Chief Executive Officer, Chief Financial Officer or such other officers as are reasonably acceptable to the Purchaser for the purpose of responding to customary "due diligence" questions of the Purchaser and its counsel. (k) The Purchased Shares shall have been approved for listing on the New York Stock Exchange, subject to notice of issuance. The Company will furnish the Purchaser with such conformed copies of such opinions, certificates, letters and documents as the Purchaser reasonably requests. 7. Indemnification and Contribution. (a) The Company will indemnify and hold harmless the Purchaser against any losses, claims, damages or liabilities to which the Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Purchaser for any legal or other expenses reasonably incurred by the Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by the Purchaser specifically for use therein, it being understood and agreed that the only such information furnished by the Purchaser consists of the information described as such in subsection (b) below. With respect to all other matters, the Company will also indemnify and hold harmless the Purchaser against any losses, claims, damages or liabilities to which the Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon this Agreement, the Equity Forward, the transactions contemplated hereby or thereby, or any actions or inactions on behalf of the Purchaser in connection therewith and will reimburse the Purchaser 14 for any legal or other expenses reasonably incurred by the Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable for indemnification or otherwise for any such loss, claims, damage or liability to the extent arising from gross negligence or willful misconduct of the Purchaser. (b) The Purchaser will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Purchaser for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by the Purchaser consists of the following information in the Prospectus furnished on behalf of the Purchaser: the language concerning stabilizing under the caption "Plan of Distribution" in the Prospectus. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party, of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section, for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action; and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party. (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchaser on the other from the transactions contemplated by this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Purchaser on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand 15 and the Purchaser on the other hand shall be deemed to be in the same proportion as (x) the aggregate purchase price paid to the Company by the Purchaser for the Purchased Shares bears to (y) the compensation received by the Purchaser pursuant to Section 3. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Purchaser shall not be required to contribute any amount in excess of the amount by which the total price at which the Purchased Shares were offered to the public exceeds the amount of any damages which the Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Purchaser within the meaning of the Act; and the obligations of the Purchaser under this Section shall be in addition to any liability which the Purchaser may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company, to each officer of the Company who has signed the Registration Statement and to each person, if any, who controls the Company within the meaning of the Act. 8. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Purchased Shares. If for any reason the purchase of the Purchased Shares by the Purchaser is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Purchaser pursuant to Section 7 shall remain in effect. If the purchase of the Purchased Shares by the Purchaser is not consummated for any reason other than the occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the Purchaser for all out-of-pocket expenses reasonably incurred by them in connection with the purchase and the offering of the Purchased Shares and not otherwise subject to reimbursement pursuant to Section 5(j). 9. Notices. All communications hereunder will be in writing and, if sent to the Purchaser, will be mailed, delivered or telegraphed and confirmed to the Purchaser at Eleven Madison Avenue, New York, NY 10010-3629, Attention: Transactions Advisory Group, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 1370 Avenue of the Americas, 25th Floor, New York, NY 10019, Attention: General Counsel. 10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors, and no other person will have any right or obligation hereunder. 16 11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 17 If the foregoing is in accordance with the Purchaser's understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the Purchaser in accordance with its terms. Very truly yours, SEACOR SMIT INC. By_____________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CREDIT SUISSE FIRST BOSTON CORPORATION By________________________ Name: Title: As the Purchaser. 18 Exhibit A Subsidiaries ------------ SEACOR SMIT Inc. CRN Holdings Inc. National Response Corporation Anna Offshore Inc. Arthur Levy Enterprises, Inc. Graham Boats Inc. SEACOR Communications Inc. SEACOR Deepwater 1 Inc. SEACOR Deepwater 2 Inc. SEACOR Deepwater 3 Inc. SEACOR Marine (Mexico) Inc. SEACOR Marine Inc. SEACOR Marine International Inc. SEACOR Offshore Inc. SEACOR Offshore Rigs Inc. SEACOR Supply Ships Associates Inc. SEACOR VISION LLC SEACOR Worldwide Inc. SEACOR-SMIT Offshore I, Inc. Veesea Holdings Inc. VISION OFFSHORE Inc. McCall Enterprises Inc. Graham Offshore Inc. ERST/O'Brien's, Inc. McCall's Boat Rentals Inc. The Netherlands SEACOR-SMIT Holdings B.V. SEACOR-SMIT Offshore I B.V. SEACOR-SMIT Offshore II B.V. England & Wales SEACOR Capital (UK) Ltd. Bahamas SEACOR-SMIT Offshore (International) Ltd. SEACOR-SMIT Offshore (Worldwide) Ltd. EX-1 3 0003.txt 1.2 Exhibit 1.2 ----------- (MULTICURRENCY-CROSS BORDER) ISDA-Registered Trademark- International Swap Dealers Association, Inc. MASTER AGREEMENT dated as of January 12, 2001 CREDIT SUISSE FIRST BOSTON INTERNATIONAL and SEACOR SMIT INC. have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence (each a "Confirmation") exchanged between the parties confirming those Transactions. Accordingly, the parties agree as follows:-- 1. INTERPRETATION (a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement. (b) INCONSISTENCY. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purposes of the relevant Transaction. (c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmation form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transactions. 2. OBLIGATIONS (a) GENERAL CONDITIONS. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement. (ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. (iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement. (b) CHANGE OF ACCOUNT. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change. (c) NETTING. If on any date amounts would otherwise be payable:-- (i) in the same currency; and (ii) in respect of the same Transaction, by each party to the other, then, on such date, each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries. (d) DEDUCTION OR WITHHOLDING FOR TAX. (i) GROSS-UP. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party ("X") will:-- (1) promptly notify the other ("Y") of such requirement; (2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y; (3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and 2 (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:-- A. the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or B. the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law. (ii) LIABILITY. If:-- (1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4); (2) X does not so deduct or withhold; and (3) a liability resulting from such Tax is assessed directly against X, then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)). (e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement. 3. REPRESENTATIONS Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:-- (a) BASIC REPRESENTATIONS. (i) STATUS. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing; 3 (ii) POWERS. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance; (iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) CONSENTS. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and (v) OBLIGATIONS BINDING. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)). (b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party. (c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is furnished in writing by or on behalf of it to the other parry and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect. (e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true. (f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. 4. AGREEMENTS Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party: -- (a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:-- 4 (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation; (ii) any other documents specified in the Schedule or any Confirmation; and (iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification, in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable. (b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future. (c) COMPLY WITH LAWS. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party. (d) TAX AGREEMENT. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure. (e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party. 5. EVENTS OF DEFAULT AND TERMINATION EVENTS (a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an "Event of Default") with respect to such party: -- (i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party; (ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or 5 obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party; (iii) CREDIT SUPPORT DEFAULT. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document; (iv) MISREPRESENTATION. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated. (v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); (vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Specified Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); (vii) BANKRUPTCY. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party: -- (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability 6 generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, staved or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or (viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:-- (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or (2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement. (b) TERMINATION EVENTS. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event. Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:-- (i) ILLEGALITY. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):-- (1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or 7 (2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction; (ii) TAX EVENT. Due to (x) any action taken by a tax authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B)); (iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii); (iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is specified in the Schedule as applying to the party, such party ("X"), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case my be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or (v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation). (c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated is an Illegality and will not constitute an Event of Default. 6. EARLY TERMINATION (a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party") may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant 8 petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8). (b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT. (i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require. (ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist. If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i). Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party's policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed. (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event. (iv) RIGHT TO TERMINATE. If:-- (1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party, either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions. 9 (c) EFFECT OF DESIGNATION. (i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing. (ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e). (d) CALCULATIONS. (i) STATEMENT. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation. (ii) PAYMENT DATE. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the following provisions shall apply based on the parties' election in the Schedule of a payment measure, either "Market Quotation" or "Loss", and a payment method, either the "First Method" or the "Second Method". If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that "Market Quotation" or the "Second Method", as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off. (i) EVENTS OF DEFAULT. If the Early Termination Date results from an Event of Default:-- (1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. (2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect of this Agreement. (3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the 10 Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (ii) TERMINATION EVENTS. If the Early Termination Date results from a Termination Event:-- (1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions. (2) Two Affected Parties. If there are two Affected Parties:-- A. if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount ("X") and the Settlement Amount of the party with the lower Settlement Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and B. if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss ("X") and the Loss of the party with the lower Loss ("Y"). If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y. If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of the amount to Y. (iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early Termination Date occurs because "Automatic Early Termination" applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be 11 entitled to recover any additional damages as a consequence of such losses. 7. TRANSFER Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:-- (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e). Any purported transfer that is not in compliance with this Section will be void. 8. CONTRACTUAL CURRENCY (a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess. (b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term "rate of exchange" includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency. (c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party 12 to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement. (d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made. 9. MISCELLANEOUS (a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto. (b) AMENDMENTS. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system. (c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) COUNTERPARTS AND CONFIRMATIONS. (i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. (ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation. (f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. (g) HEADINGS. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 10. OFFICES; MULTIBRANCH PARTIES (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its 13 head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into. (b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party. (c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation. 11. EXPENSES A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection. 12. NOTICES (a) EFFECTIVENESS. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:-- (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient's answerback is received; (iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day. (b) CHANGE OF ADDRESSES. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it. 13. GOVERNING LAW AND JURISDICTION (a) GOVERNING LAW. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. 14 (b) JURISDICTION. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-- (i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum, and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. (c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law. (d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings. 14. DEFINITIONS As used in this Agreement:- "ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b). "AFFECTED PARTY" has the meaning specified in Section 5(b). "AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions. "AFFILIATE" means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, "control" of any entity or person means ownership of a majority of the voting power of the entity or person. 15 "APPLICABLE RATE" means:-- (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate; (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate; (c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and (d) in all other cases, the Termination Rate. "BURDENED PARTY" has the meaning specified in Section 5(b). "CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into. "CONSENT" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b). "CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as such in this Agreement. "CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule. "DEFAULT RATE" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus l% per annum. "DEFAULTING PARTY" has the meaning specified in Section 6(a). "EARLY TERMINATION DATE" means the date determined in accordance with Section 6(a) or 6(b)(iv). "EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable, in the Schedule. "ILLEGALITY" has the meaning specified in Section 5(b). "INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document). "LAW" includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly. 16 "LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and. if different. in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction. "LOSS" means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets. "MARKET QUOTATION" means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the "Replacement Transaction") that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (with regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined. 17 "NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount. "NON-DEFAULTING PARTY" has the meaning specified in Section 6(a). "OFFICE" means a branch or office of a party, which may be such party's head or home office. "POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city. "RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made. "SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction. "SET-OFF" means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer. "SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination Date, the sum of:- (a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result. "SPECIFIED ENTITY" has the meaning specified in the Schedule. "SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money. "SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (of any Credit Support Provider of such other parry or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of 18 these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "STAMP TAX" means any stamp, registration, documentation or similar tax. "TAX" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax. "TAX EVENT" has the meaning specified in Section 5(b). "TAX EVENT UPON MERGER" has the meaning specified in Section 5(b). "TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if "Automatic Early Termination" applies, immediately before that Early Termination Date). "TERMINATION CURRENCY" has the meaning specified in the Schedule. "TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in currency other than the Termination Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties. "TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts. "UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination Date the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to, such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred 19 to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties. 20 IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. CREDIT SUISSE FIRST BOSTON INTERNATIONAL SEACOR SMIT INC. ............................... ............................. (Name of Party) (Name of Party) By:............................ By:.......................... Name: Name: Title: Title: Date: January __, 2001 Date: January __, 2001 21 SCHEDULE to the MASTER AGREEMENT dated as of January 12, 2001 between CREDIT SUISSE FIRST BOSTON INTERNATIONAL, AND SEACOR SMIT INC. an unlimited company incorporated a Delaware corporation under the laws of England and Wales ("PARTY A") ("PARTY B") PART 1 TERMINATION PROVISIONS In this Agreement:- (A) SPECIFIED ENTITY. "Specified Entity" means "Affiliates" in relation to Party A and Party B for the purpose of the "Default under Specified Transaction" provision (Section 5(a)(v)). (B) SPECIFIED TRANSACTION. Specified Transaction will have the meaning specified in Section 14. (C) CROSS DEFAULT. The "Cross Default" provision (Section 5(a)(vi)) will apply to Party A and Party B amended as follows:- Specified Indebtedness Instead of the definition in Section 14 of this Agreement, "Specified Indebtedness" shall mean any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) (a) in respect of borrowed money, and/or (b) in respect of any Specified Transaction (except that, for this purpose only, the words "and any other entity" shall be substituted for the words "and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party)" where they appear in the definition of Specified Transaction). Threshold Amount "Threshold Amount" means $10,000,000 (or its equivalent with respect to obligations stated in any other currency or currency unit). (D) CREDIT EVENT UPON MERGER. The "Credit Event Upon Merger" provision (Section 5(b)(iv)) will apply to Party A and Party B restated as follows:- "Credit Event Upon Merger" shall mean that a Designated Event (as defined below) occurs with respect to a party ("X"), and such Designated Event does not constitute an event described in Section 5(a)(viii) of this Agreement but the creditworthiness of X or, if applicable, the successor, surviving or transferee entity of X, is materially weaker than that of X immediately prior to such action (and, in such event, such party or its successor or transferee, as appropriate, will be the Affected Party). For purposes hereof, a Designated Event with respect to X means that, after the Trade Date of the first Transaction between the parties: (i) X consolidates or amalgamates with or merges with or into, or transfers all or substantially all its assets (or any substantial part of the assets comprising the business conducted by X as of the execution date hereof) to, or receives all or substantially all the assets or obligations of, another entity; (ii) any person or entity acquires directly or indirectly the beneficial ownership of equity securities having the power to elect a majority of the board of directors of X or otherwise acquires directly or indirectly the power to control the policy-making decisions of X; or (iii) X effects any substantial change in its capital structure by means of the issuance, incurrence or guarantee of debt or the issuance of preferred stock or other securities convertible into, or exchangeable for, debt or preferred stock. (E) AUTOMATIC EARLY TERMINATION. The "Automatic Early Termination" provision of Section 6(a) will not apply to Party A and Party B. (F) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second Method and Market Quotation will apply. (G) TERMINATION CURRENCY. "Termination Currency" means the currency selected in good faith and in a commercially reasonable manner by the party which is not the Defaulting Party or the Affected Party, as the case may be, or where there is more than one Affected Party the currency agreed by Party A and Party B. However, the Termination Currency shall be one of the currencies in which payments are required to be made in respect of Transactions. If the currency selected is not freely available, or where there are two Affected Parties and they cannot agree on a Termination Currency, the Termination Currency shall be United States Dollars. (H) ADDITIONAL TERMINATION EVENT. Additional Termination Event will not apply. 2 PART 2 TAX REPRESENTATIONS (A) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e), Party A and Party B each makes the following representation:- It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e)) to be made by it to the other party under this Agreement. In making this representation, it may rely on:- (i) the accuracy of any representation made by the other party pursuant to Section 3(f); (ii) the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii); and (iii) the satisfaction of the agreement of the other party contained in Section 4(d); provided that it shall not be a breach of this representation where reliance is placed on clause (ii), and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position. (B) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f), (i) Party A represents that (A) it is entering into each Transaction in the ordinary course of its trade as, and is, a recognised U.K. bank and (B) it will bring into account payments made and received in respect of each Transaction in computing its income for United Kingdom tax purposes. (ii) Party B makes no Payee Tax Representations. 3 PART 3 AGREEMENT TO DELIVER DOCUMENTS Each party agrees to deliver the following documents as applicable:- (a) For the purpose of Section 4(a)(i), tax forms, documents or certificates to be delivered are:- PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED Not Applicable Not Applicable Not Applicable (b) For the purpose of Section 4(a)(ii), other documents to be delivered are:- PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH COVERED BY DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED SECTION 3(D) REPRESENTATION Party A and Evidence reasonably Upon execution Yes Party B satisfactory to the this Agreement other party as to the and, if requested, names, true signatures upon execution and authority of the of any Confirmation officers or officials signing this Agreement or any Confirmation on its behalf Party A and A copy of the annual Upon request, as No Party B report for such party soon as publicly certified financial available statements for the most recently ended financial year
The parties hereto agree that any documents delivered by one party to another hereunder shall be treated by the recipient as confidential and the information contained therein shall not be copied or disclosed to any other person or entity without the prior written consent of the party delivering such documents; provided, however, notwithstanding anything to the contrary in this Agreement, neither of the parties shall be prohibited from disclosing such material (i) to officers in its credit departments and to any senior business managers having credit and risk management responsibilities, or (ii) where such party is required to do so pursuant to any applicable law or regulation 4 PART 4 MISCELLANEOUS (A) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):- (i) (1) Address for notices or communications to Party A (other than by facsimile):- Address: One Cabot Square Attention: (1) Head of Credit Risk Management; London E14 4QJ (2) Managing Director - England Operations Department; (3) Managing Director - Legal Department Telex No.: 264521 Answerback: CSFBI G (For all purposes.)
(2) For the purpose of facsimile notices or communications under this Agreement (other than a notice or communication under Section 5 or 6):- Facsimile No.: 020 7888 2686 Attention: Managing Director - Legal Department Telephone number for oral confirmation of receipt of facsimile in legible form: 020 7888 2028 Designated responsible employee for the purposes of Section 12(a)(iii): Senior Legal Secretary (ii) Address for notices or communications to Party B:- Address: 1370 Avenue of the Americas Attention:Dick Fagerstal New York, NY 10019 ------------------------ ------------------------ Telex No.: ___________ Answerback: ___________ Telephone No.: (212) 621-9283 Facsimile No.: (212) 582-8522 (For all purposes.)
(B) PROCESS AGENT. For the purpose of Section 13(c):- Party A appoints as its Process Agent:- Credit Suisse First Boston, Eleven Madison Avenue, New York, NY 10010 (Attention:- General Counsel, Legal and Compliance Department) Party B appoints as its Process Agent: Not Applicable (C) OFFICES. The provisions of Section 10(a) will apply to this Agreement. (D) MULTIBRANCH PARTY. For the purpose of Section 10(c):- 5 Party A is not a Multibranch Party. Party B is not a Multibranch Party (E) CALCULATION AGENT. The Calculation Agent is Party A unless otherwise agreed in a Confirmation in relation to the relevant Transaction and unless an Event of Default or Termination Event with respect to Party A has occurred, which in such case shall result in Party B being the Calculation Agent. The Calculation Agent shall make all calculations under this Agreement in good faith and in a commercially reasonable manner. (F) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document: Not applicable. (G) CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to Party A: Not applicable. Credit Support Provider means in relation to Party B: Not applicable. (H) GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of the State of New York without reference to choice of law doctrine and each party hereby submits to the jurisdiction of the Courts of the State of New York. (I) NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will apply to any Transactions from the date of this Agreement. Nevertheless, to reduce settlement risk and operational costs, the parties agree that they will endeavour to net across as many Transactions as practicable wherever the parties can administratively do so. The parties will confirm to each other, via telephone, the net amounts to be transferred on each date that amounts are to be transferred under this Agreement. (J) AFFILIATE. Affiliate will have the meaning specified in Section 14. 6 PART 5 OTHER PROVISIONS (A) SCOPE OF AGREEMENT. Any Specified Transaction (whether now existing or hereafter entered into) between the parties, the confirmation of which fails by its terms expressly to exclude application of this Agreement, shall be governed by and be subject to this Agreement. Any such confirmation shall be a "Confirmation", and any such Specified Transaction shall be a "Transaction", for all purposes of this Agreement. (B) DEFINITIONS. Unless otherwise specified in a Confirmation, this Agreement and each Transaction between the parties are subject to the 1991 ISDA Definitions as amended by the 1998 Supplement thereto as published by the International Swaps and Derivatives Association, Inc. (the "1991 Definitions"), and will be governed in all relevant respects by the provisions set forth in the 1991 Definitions, without regard to any amendment to the 1991 Definitions subsequent to the date hereof. The provisions of the 1991 Definitions are incorporated by reference in and shall be deemed a part of this Agreement, except that references in the 1991 Definitions to a "Swap Transaction" shall be deemed references to a "Transaction" for purposes of this Agreement. (C) CONFIRMATIONS. Each Confirmation shall be substantially in the form of one of the Exhibits to the 1991 Definitions, the 1993 ISDA Commodity Derivatives Definitions, in any other form which is published by the International Swaps and Derivatives Association, Inc. or in such other form as the parties may agree. (D) INDEPENDENT RELIANCE. The parties agree to amend Section 3 of this Agreement by the addition of the following provision at the end thereof and marked as subsection (g). "(g) INDEPENDENT RELIANCE. It is entering into this Agreement and will enter into each Transaction in reliance upon such tax, accounting, regulatory, legal, and financial advice as it deems necessary and not upon any view, communication (written or oral) expressed by the other party." (E) CHANGE OF ACCOUNT. Section 2(b) of this Agreement is hereby amended by the addition of the following after the word "delivery" in the first line thereof:- "to another account in the same legal and tax jurisdiction as the original account" (F) ESCROW PAYMENTS. If (whether by reason of the time difference between the cities in which payments are to be made or otherwise) it is not possible for simultaneous payments to be made on any date on which both parties are required to make payments hereunder, either party may at its option and in its sole discretion notify the other party that payments on that date are to be made in escrow. In this case deposit of the payment due earlier on that date shall be made by 2.00 pm (local time at the place for the earlier payment) on that date with an escrow agent selected by the notifying party, accompanied by irrevocable payment instructions (i) to release the deposited payment to the intended recipient upon receipt by the escrow agent of the required deposit of the corresponding payment from the other party on the same date accompanied by irrevocable payment instructions to the same effect or (ii) if the required deposit of the corresponding payment is not made on that same date, to return the payment deposited to the party that paid it into escrow. The party that elects to have payments made in escrow shall pay all costs of the escrow arrangements. (G) SET-OFF. Without affecting the provisions of this Agreement requiring the calculation of certain net payment amounts, all payments under this Agreement will be made without set-off or counterclaim; provided, however, that upon the designation of any Early Termination Date, in addition to and not in limitation of any other right or remedy (including any right to set-off, counterclaim, or otherwise withhold payment) under applicable law: 7 the Non-defaulting Party or the party that is not the Affected Party (in either case, "X") may, without prior notice to any person, set off any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by the Defaulting Party or Affected Party (in either case, "Y") to X or to any Affiliate of X, against any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by X or any Affiliate of X to Y, and, for this purpose, may convert one currency into another. If any sum or obligation is unascertained, X may in good faith estimate that sum or obligation and set off in respect of that estimate, subject to X or Y, as the case may be, accounting to the other party when such sum or obligation is ascertained. Nothing in this Agreement shall be effective or deemed to create any charge under English law. (H) INCORPORATION OF PROTOCOL TERMS. The parties agree that the definitions and provisions contained in Annexes 1 to 5 and Section 6 of the EMU Protocol published by the International Swaps and Derivatives Association, Inc., on 6 May, 1998 are incorporated into and apply to this Agreement. References in those definitions and provisions to any "ISDA Master Agreement" will be deemed to be references to this Agreement. (I) RECORDING OF CONVERSATION. Each party to this Agreement acknowledges and agrees to the tape recording of conversations between the parties to this Agreement whether by one or other or both of the parties and each party hereby consents to such recordings being used as evidence in Proceedings. (J) WAIVER OF RIGHT TO TRIAL BY JURY. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Agreement or any Credit Support Document to this Agreement. Each party (i) certifies that no representative, agent or attorney of the other party or any Credit Support Provider has represented, expressly or otherwise, that such other party would not, in the event of such a suit action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into this Agreement and provide for any Credit Support Document, as applicable by, among other things, the mutual waivers and certifications in this Section. 8 PART 6 PHYSICAL DELIVERY OF BONDS Notwithstanding anything to the contrary in this Agreement, the following provisions will apply for the purposes of any Transaction which contemplates by its terms the physical delivery of bonds or other debt securities ("Bonds"): - (I) PAYMENT AND DELIVERY Section 2 of this Agreement is hereby amended as follows: (a) Section 2(b) is amended by the substitution of "ten days" for "five days"; (b) The following provision shall be included as Section 2(f): "(f) Coupons and Expenses on Delivery: All coupons on the Bonds to be delivered shall be payable to and all costs and expenses incurred in connection with the delivery of Bonds (including, without prejudice to Section 2(d), any Tax or Stamp Tax and any interest or penalties payable in connection therewith) shall be payable by the party who would customarily receive such coupon or bear such costs or expenses under a contract for the purchase of the Bonds, as appropriate, by the delivery through the clearance system specified in the relevant Confirmation." (II) DEFAULT INTEREST If, prior to the occurrence or effective designation of an Early Termination Date in respect of any physically settled Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will indemnify the other party on demand, in accordance with the practice of the principal market for or the Bonds, for any costs reasonable and verifiable, losses or expenses (including the costs of borrowing such Bonds, if applicable) incurred from such default. A certificate signed by the deliveree setting out such costs, losses or expenses in reasonable detail shall be conclusive evidence that they have been incurred. (III) AMENDMENTS TO SECTION 14 OF THE AGREEMENT The definition of "Tax" in Section 14 of the Agreement is amended by the addition of "or delivery" after "of any payment". (IV) AGREEMENTS Section 4(e) is amended by adding the words "Subject to Section 2(f), where in respect of a Transaction, performance under this Agreement consists in a delivery of Bonds, and" before "subject to Section 11 ..." in line 1. 9 January 12, 2001 Mr. Dick Fagerstal Vice President - Finance SEACOR SMIT Inc. 1370 Avenue of the Americas New York, NY 10019 Credit Suisse First Boston International One Cabot Square London E14 4QJ England - ------------------------------------------------------------------------ Dear Sirs, The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Transaction entered into between Party A and Party B through the Agent on the Trade Date specified below (the "Transaction"). This Confirmation constitutes a "Confirmation", as referred to in the Agreement specified below. 1. The definitions and provisions contained in the 1991 ISDA Definitions, as supplemented by the 1998 Supplement to the 1991 ISDA Definitions (the "Swap Definitions") and in the 1996 ISDA Equity Derivatives Definitions (the "Equity Definitions", together with the Swap Definitions, the "Definitions") (in each case as published by the International Swaps and Derivatives Association, Inc.) are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern, and between the Definitions and this Confirmation, this Confirmation will govern. References herein to a "Transaction" shall be deemed to be references to a "Swap Transaction" for the purposes of the Swap Definitions and to a "Share Option Transaction" for the purposes of the Equity Definitions. This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as of January__, 2001, as amended and supplemented from time to time (the "Agreement"), between Party A and Party B. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. 10 IN THIS CONFIRMATION, "PARTY A" MEANS CREDIT SUISSE FIRST BOSTON INTERNATIONAL AND "PARTY B" MEANS SEACOR SMIT INC. AND "ARRANGING AGENT" MEANS CREDIT SUISSE FIRST BOSTON CORPORATION SOLELY IN ITS CAPACITY AS ARRANGING AGENT FOR BOTH PARTY A AND PARTY B. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: General Terms: Trade Date: February __, 2001 Effective Date: February __, 2001 Termination Date: February __, 2002, subject to adjustment in accordance with the Modified Following Business Day Convention and the terms set forth below under Party B Settlement Method Option and Party B Optional Termination. Transaction Type: Equity Forward Seller: Party A Buyer: Party B (also sometimes referred to herein as the "Issuer") Shares: Common Stock of Party B par value $0.01, Ticker "CKH" Notional Amount: The product of the Principal Share Amount and the Initial Share Price Principal Share Amount: The number of Purchased Shares (as defined in the Underwriting Agreement) Initial Share Price: The Purchase Price (as defined in the Underwriting Agreement) Underwriting Agreement: The Standby Agreement dated January __, 2001 between Party B and the Underwriter (as defined below) Party A Payment Amounts: 11 Party A Payment Date: The Settlement Date Party A Payments: In respect of the Party A Payment Date, an amount in U.S. Dollars equal to the Dividend Amount. Dividend Amount: An amount in U.S. Dollars, if any, equal to the sum of: (i) the sum of the per Share amount of each dividend paid by the Issuer from and including the Effective Date to but excluding the Termination Date multiplied by the Principal Share Amount as of the record date for such dividend; provided, however, that for the purpose of determining the Dividend Amount in the case that Net Cash Settlement has been designated as the Method of Settlement, the Principal Share Amount shall be reduced by the number of Shares sold by the Underwriter prior to the record date in respect of such dividend during the relevant Sale Period (as defined below); and (ii) the sum of the amounts representing the interest that would have been earned on each dividend described in (i) above at a rate equal to USD-LIBOR-BBA with a Designated Maturity equal to the period of time commencing from and including the date that such dividends would have been received in (i) above to but excluding the Termination Date, where Linear Interpolation is applicable and the Day Count Fraction is Actual/360. 12 Lagging Dividend Payment Amount: In the event that a dividend is declared and payable to a holder of record prior to the Termination Date but such dividend has not been paid on or before the Termination Date, Party A shall pay to Party B on the Termination Date, through the Arranging Agent, an amount equal to the present value on the Termination Date of the amount of such dividend, which present value shall be calculated by discounting from the dividend payment date to the Termination Date at a discount rate equal to USD-LIBOR-BBA with a Designated Maturity equal to the period of time from and including the Termination Date to but excluding the dividend payment date, where Linear Interpolation is applicable and the Day Count Fraction is Actual/360. Party B Floating Amount: Floating Amount Payer: Party B Floating Rate Option: USD-LIBOR-BBA Spread: Plus 1.15% Designated Maturity: 1, 2, 3 or 6 months, as determined by Party B on the Effective Date. Floating Rate Day Count Fraction: Actual/360 Reset Dates: The first day of each Compounding Period Compounding: Applicable Compounding Date[s]: [_______], subject to adjustment in accordance with the Modified Following Business Day Convention. Floating Rate Payment Date: The Settlement Date 13 Adjustments to the Calculation Amount: In the case that Net Cash Settlement has been designated as the Method of Settlement in respect of this Transaction, then the Calculation Amount shall be periodically reduced during the Sale Period (as defined below) by amounts equal to the Net Proceeds (as defined below) received by the Underwriter as proceeds from sales of the Shares, which reduction shall occur on each Business Day on which such Net Proceeds are received as immediately available funds by the Underwriter. Additional Party B Payment: On the Trade Date, Party B shall pay to Party A, through the Arranging Agent, the standby fee, as set forth in paragraph 3(b) of the Underwriting Agreement. 3. Party A and Party B Final Payments and Settlement Method Options: 3.1 Party B may elect, by notice in writing to Party A (given through the Arranging Agent) on any Exchange Business Day on or prior to the date that is three (3) Exchange Business Days prior to the Termination Date, that Net Cash Settlement (as defined below) shall be the method of settlement ("Method of Settlement") in respect of this Transaction in place of Gross Physical Settlement (as defined below), subject to the conditions set forth below. If no such election is made, or if any such conditions are not met, "Gross Physical Settlement" shall apply to this Transaction. 3.2 Gross Physical Settlement: If Gross Physical Settlement is the Method of Settlement in respect of this Transaction then, on the Settlement Date (as defined below), Party A will deliver to Party B, through the Arranging Agent, the Principal Share Amount, and Party B will pay to Party A, through the Arranging Agent, an amount in U.S. Dollars equal to the sum of the Notional Amount and the Party B Floating Amount (such sum being the "Party B Payment Amount"). 3.3 Net Cash Settlement: 3.3.1 If Party B elects Net Cash Settlement as the Method of Settlement and Party B satisfies the conditions precedent set forth in paragraphs 3.1 and 3.3.4 hereof, then the Underwriter shall sell, in accordance with the terms hereof, the number of Shares from the Principal Share Amount 14 (the "Shares Sold") necessary in order to realize sufficient Net Proceeds (as defined below) to pay Party A the Party B Payment Amount, and the Underwriter shall pay such proceeds to Party A on the Settlement Date. If the number of Shares Sold is less than the Principal Share Amount, the Underwriter shall also deliver to Party B on the Settlement Date a number of Shares equal to the excess of the Principal Share Amount over the number of Shares Sold. On the Settlement Date, the Underwriter shall also pay to Party B a sum in U.S. Dollars equal to the amount, if any, by which the Net Proceeds from the sale of the Shares Sold exceeds the Party B Payment Amount. 3.3.2 If insufficient Net Proceeds have been realized from the sale of the Shares Sold to pay Party A the Party B Payment Amount, then Party B shall, on the Settlement Date, pay to Party A an amount in cash equal to the amount by which the Party B Payment Amount exceeds the Net Proceeds. 3.3.3 In the event that Party B elects Net Cash Settlement as the Method of Settlement and Party B satisfies the conditions precedent set forth in paragraphs 3.1 and 3.3.4 hereof, the Underwriter agrees to provide to the Calculation Agent and the parties hereto, through the Arranging Agent, not later than 5:00 p.m., New York time, on any Business Day on which it has sold Shares, a report of the number of Shares sold, the average sale price and the aggregate Net Proceeds received by the Underwriter from such sales and a reasonable breakdown of the Sale Expenses (as defined below). The term "Net Proceeds" in respect of a sale of Shares shall mean gross proceeds of such sale less reasonable and customary discounts, fees, commissions and expenses (the "Sale Expenses"), including, but not limited to, commissions in the amount of $.04 per Share, discounts, fees and expenses customarily payable to underwriter(s) in the case of a registered offering, which may include reasonable amounts customarily payable to the Underwriter acting as underwriter, as well as any additional reasonable fees and expenses of any dealers engaged by any such underwriter which are customarily payable. 3.3.4 It shall be a condition precedent to Party B's election of Net Cash Settlement that Party B shall have satisfied all of the conditions set forth in the Underwriting Agreement in respect of such Net Cash Settlement. If Party B elects Net Cash Settlement but such conditions cease to be met at any time following the Termination Date but prior to the last date of the Sale Period, then Gross Physical Settlement shall apply to this Transaction, provided that the Party B Payment Amount shall be deemed reduced by the amount of Net Proceeds from sales of Shares that occurred prior to the time such conditions failed to be met (which Net Proceeds shall be paid to Party A by the Underwriter), and the Principal Share Amount shall be deemed reduced by the number of Shares sold prior to the time such conditions failed to be met 15 4. Party B Early Termination Option: 4.1 On any Business Day during the period from, and including, the Effective Date to, but excluding, the Termination Date, Party B may, upon at least three (3) Exchange Business Days' prior notice to Party A (an "Early Termination Notice"), designate any Exchange Business Day as an optional termination date (the "Early Termination Date") in respect of the whole or a part of the Principal Share Amount. 4.2 Upon the exercise of this option in respect of a part of the Principal Share Amount, and with effect from (and including) the relevant Early Termination Date, the Calculation Agent shall reduce by the Termination Ratio (as defined below) the Principal Share Amount, Notional Amount and Calculation Amount at that time. On each Early Termination Date the terms of Section 3 herein shall be applicable, including the terms relating to the Method of Settlement, as if such Early Termination Date were the Termination Date and the Principal Share Amount, the Notional Amount and the Calculation Amount were the product of the Termination Ratio and the Principal Share Amount, the Notional Amount and the Calculation Amount, respectively, at the time the Early Termination Notice was given, that is the subject of the relevant Early Termination Notice. 4.3 Upon the exercise of this option in respect of the whole of the Principal Share Amount, this Transaction shall be terminated on the relevant Early Termination Date and the terms of Section 3 hereof shall be applicable, including the terms relating to the Method of Settlement, as if such Early Termination Date were the Termination Date. 4.4 As used herein, "Termination Ratio" means a fraction, the denominator of which is the Principal Share Amount at that time and the numerator of which is that part of such Principal Share Amount that is the subject of the relevant Early Termination Notice. 4.5 Any notice given in accordance with this provision may be given in writing or orally, including by telephone. Any notice given orally shall be followed promptly by written confirmation of such notice, provided, however, that failure to deliver such written confirmation shall not vitiate the oral notice. 5. Gross Physical Settlement in Lieu of Certain Payment Obligations If Party B shall owe Party A any amount pursuant to Section 9.7 of the Equity Definitions (except in the event of a Nationalization, a Merger Event in which the merger consideration to be paid to holders of Shares consists solely of cash or an Insolvency) or pursuant to Section 6 of the Agreement (except in the event of an Event of Default with respect to which Party B is the Defaulting Party or a Termination Event in which Party B is the only Affected Party) (in either case, a "Payment 16 Obligation"), Party B may, by notice in writing to Party A (given through the Arranging Agent), elect in lieu of satisfying such Payment Obligation that this Transaction be subject to Gross Physical Settlement, in which case the provisions of Section 3.2 shall apply; provided that (i) the Early Termination Date shall be deemed to be the Settlement Date for purposes of such Section 3.2; (ii) in the case of a Merger Event, Party A will deliver to Party B, through the Arranging Agent, in lieu of the Principal Share Amount, the merger consideration received by a holder of the Principal Share Amount in such Merger Event, assuming for purposes of this calculation that such holder elected to receive the maximum possible amount of cash as consideration in such Merger Event; and (iii) the Calculation Agent shall be entitled to adjust either the Party B Payment Amount or the Principal Share Amount so that the net value to Party A of the payments and deliveries set forth in Section 3.2 shall equal the Payment Obligation. 6. Party A agrees that in the event of the Bankruptcy of Party B, Party A shall not have any right in respect of this Transaction or assert a claim in respect of this Transaction that in either case is senior in priority to the rights and claims available to the shareholders of the Shares; provided that this provision shall not be applicable at any time at which Party B would be required to account for this Transaction as an asset or a liability in accordance with generally accepted accounting principles. 7. For the avoidance of doubt, the last sentence of the first paragraph of 6(e) of the Agreement, the provisions in Part 5, Section 5(g) ("Set-Off") of the Schedule to the Agreement shall not apply with respect to this Transaction; provided that this provision shall not be applicable at any time at which Party B would be required to account for this Transaction as an asset or a liability in accordance with generally accepted accounting principles. 8. The parties acknowledge that this Transaction is not secured by any collateral that would otherwise secure the obligations of Party B herein under or pursuant to the Agreement. Without limiting the generality of the foregoing, this Transaction will not be considered to create obligations covered by any collateral credit support annex to the Agreement and will be disregarded for the purposes of calculating any exposures pursuant to any such annex. 9. Provisions related to Settlement: 9.1 Settlement Date: The period commencing on the Termination Date and continuing until the completion of the sales and any deliveries of Shares related thereto required for Net Cash Settlement shall be referred to herein as the "Sale Period." 17 The "Settlement Date" shall be (i) the third Exchange Business Day that is also a Clearance System Business Day following the end of the Sale Period in the case of Net Cash Settlement, and (ii) the Termination Date in the case of Gross Physical Settlement. 9.2 Settlement Disruption Event: An event beyond the control of the parties as a result of which (i) the Clearance System cannot clear a transfer of Shares or (ii) in the case of any Shares in physical certificate form, the payment systems for bank fund transfers (e.g. the Federal Reserve wire payment system) cannot make electronic funds payments or otherwise transfer funds in the ordinary course. 10 Additional Terms: 10.1 Clearance System: The Depository Trust Company 10.2 Business Days: London and New York 10.3 Trading Day: An Exchange Business Day other than an Exchange Business Day on which a Market Disruption Event occurs. 10.4 Exchange Business Day: Any day that is (or, but for the occurrence of a Market Disruption Event, would have been) a Trading Day on the Exchange, other than a day on which trading on the Exchange is scheduled to close prior to its regular weekday closing time. 10.5 Market Disruption Event: The occurrence or existence on any Exchange Business Day of any suspension of or material limitation imposed on trading (by reason of movement in price exceeding limits permitted by the Exchange or otherwise) on the Exchange in the Shares if, in the reasonable determination of the Calculation Agent, such suspension or limitation materially affects the liquidity of trading in the Shares. 10.6 Exchange: The New York Stock Exchange 10.7 Calculation Agent: Party A, whose determinations and calculations hereunder as Calculation Agent will be binding in the absence of manifest error and will be made in good faith and in a commercially reasonable manner. Subject to 18 the foregoing, the Calculation Agent will have no responsibility for good faith errors or omissions in making any determination or calculation as provided herein. 10.8 Underwriter: Credit Suisse First Boston Corporation. When selling any Shares pursuant to this Transaction, the Underwriter shall determine the number of Shares to be sold on any Trading Day and the price or prices at which such Shares are sold, provided, however, that it shall act in a commercially reasonable manner. 11 Adjustments: Method of Adjustment: Calculation Agent Adjustment Extraordinary Events: Consequences of Merger Events: (a) Share-for-Share: Cancellation and Payment (b) Share-for-Other: Cancellation and Payment (c) Share-for-Combined: Cancellation and Payment (d) Nationalization or Insolvency: Cancellation and Payment For the purposes of Section 9.7 of the Equity Definitions, references to "Seller" and "Buyer" therein shall be deemed to be references to Party A and Party B, as applicable. 12. Miscellaneous Provisions: 12.1 Transfer: Neither the Transaction nor any interest or obligation in or under the Transaction may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that a party may make a transfer of the Transaction pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity, or upon or after any default of the other party. Any 19 purported transfer that is not in compliance with this paragraph will be void. 12.2 Securities Contract: Each party hereby represents to the other that it intends this Confirmation to be a securities contract within the meaning of Section 741 of Bankruptcy Code, as amended (11 U.S.C.ss.741). 13. Credit Support Documents: Party A: None Party B: None 14. Account Details: Payments to the Arranging Agent: Citibank, NY ABA # 021-000-089 A/C: Credit Suisse First Boston Corp. A/C: 40804388 FFC: A/C #: Payments to Party A: To be advised Payments to Party B: To be advised Delivery of Shares to the Arranging Agent: To be advised Delivery of Shares to Party A: To be advised Delivery of Shares to Party B: To be advised 15. U.S. Private Placement Representations As this Transaction may constitute the sale, through Arranging Agent, of a security or securities (as defined in the Securities Act of 1933 Act, as amended (the "1933 Act")), in addition to the representations contained in Section 3 of the Agreement, Party B hereby represents to Party A and Party A represents to Party B as follows: (a) Each party is entering into this Transaction through the Arranging Agent for its own account as principal, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or 20 in part, and no other person has a direct or indirect beneficial this Transaction; (b) Each party understands that the offer and sale by the other party, through the Arranging Agent, of this Transaction are intended to be exempt from registration under the 1933 Act, by virtue of Section 4(2) thereof. In furtherance thereof, each Party represents and warrants that (i) it has the financial ability to bear the economic risk of its entry into this Transaction and has adequate means of providing for its current needs and other contingencies, (ii) it is experienced in investing in forward purchase contracts and similar instruments and has determined that such transactions are suitable investments for it, and (iii) it is an institution that qualifies as an "accredited investor" as that term is defined in Regulation D under the 1933 Act; and (c) Each party has been given the opportunity to ask questions of, and receive answers from, the other party through the Arranging Agent concerning the terms and conditions of this Transaction and concerning the financial condition and business operations of the other party and has been given the opportunity to obtain such additional information necessary in order for each party to evaluate the merits and risks of this Transaction to the other party possesses such information or can acquire it without unreasonable effort or expense. 16. Matters relating to the Arranging Agent: (a) As a broker-dealer registered with the Securities and Exchange Commission, Credit Suisse First Boston Corporation in its capacity as Arranging Agent will be responsible for (i) effecting this Transaction, (ii) issuing all required confirmations and statements to Party A and Party B, (iii) maintaining books and records relating to this Transaction as required by Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934, as amended (the "1934 Act") and (iv) unless otherwise requested by Party B, receiving, delivering, and safeguarding Party B's funds and any securities in connection with this Transaction, in compliance with Rule 15c3-3 under the 1934 Act. (b) Credit Suisse First Boston Corporation is acting in connection with this Transaction solely in its capacity as Arranging Agent for Party A and Party B pursuant to instructions from Party A and Party B. Credit Suisse First Boston Corporation shall have no responsibility or personal liability to Party A or Party B arising from any failure by Party A or Party B to pay or perform any obligations hereunder, or to monitor or enforce compliance by Party A or Party B with any obligation hereunder, including without limitation, any obligations to 21 maintain collateral. Each of Party A and Party B agrees to proceed solely against the other to collect or recover any securities or monies owing to it in connection with or as a result of this Transaction. Credit Suisse First Boston Corporation shall otherwise have no liability in respect of this Transaction, except for its gross negligence or wilful misconduct in performing its duties as Arranging Agent. (c) Any and all notices, demands, or communications of any kind relating to this Transaction, including without limitation, any option exercise notice, between Party A and Party B shall be transmitted exclusively through the Arranging Agent at the following address: Credit Suisse First Boston Corporation 11 Madison Avenue New York, NY 10010 Facsimile No.: (212) 325-8175 Telephone No.: (212) 325-8678 Attention: Ricardo Harewood (d) The date and time of the Transaction evidenced hereby will be furnished by the Arranging Agent to Party A and Party B upon written request. (e) The Arranging Agent will furnish to Party B upon written request a statement as to the source and amount of any remuneration received or to be received by the Arranging Agent in connection with the Transaction evidenced hereby. (f) Party A and Party B each represents and agrees (i) that this Transaction is not unsuitable for it in the light of such party's financial situation, investment objectives and needs and (ii) that it is entering into this Transaction in reliance upon such tax, accounting, regulatory, legal and financial advice as it deems necessary and not upon any view expressed by the other party or the Arranging Agent. (g) Party A and Party B each is aware of and agrees to be bound by the rules of the National Association of Securities Dealers, Inc. ("NASD") applicable to the Transaction and is aware of and agrees not to violate, either alone or in concert with others, any applicable position or exercise limits established by the NASD. Credit Suisse First Boston International is regulated by The Securities and Futures Authority and has entered into this transaction as principal. The time 22 at which the above Transaction was executed will be notified to Party B (through the Arranging Agent) on request. [THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] 23 Please confirm that the foregoing correctly sets forth the terms of the agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us. Yours sincerely, CREDIT SUISSE FIRST BOSTON CORPORATION, solely in its capacities as Arranging Agent and Underwriter By: _____________________________ Name: Title: Confirmed as of the date first written above: CREDIT SUISSE FIRST BOSTON INTERNATIONAL By:_____________________________ Name: Title: SEACOR SMIT INC. By:______________________________ Name: Title: 24 EX-5 4 0004.txt 5.1 Exhibit 5.1 ----------- WEIL, GOTSHAL & MANGES LLP A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS 767 FIFTH AVENUE NEW YORK, NY 10153 212-310-8000 (FAX) 212-310-8007 January 18, 2001 SEACOR SMIT, Inc. 1370 Avenue of the Americas, 25th Floor New York, New York 10019 Ladies and Gentlemen: We have acted as counsel to SEACOR SMIT, Inc., a Delaware corporation (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission of the Company's Registration Statement on Form S-3 (the "Registration Statement"), under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of up to 1,136,365 shares (the "Shares") of common stock, $.01 par value, of the Company (the "Common Stock"). The Shares will be acquired by Credit Suisse First Boston (the "Underwriters") pursuant to the terms of a standby purchase agreement (the "Standby Agreement") between the Company and the Underwriters and distributed to the public pursuant to the terms of an ISDA Master Agreement, both substantially in the forms filed as exhibits to the Registration Statement. In so acting, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the Restated Certificate of Incorporation of the Company, as amended to date, the Amended and Restated By-laws of the Company, as amended to date, the Registration Statement, and such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to this opinion that have not been independently established, SEACOR SMIT, Inc. January 17, 2001 Page 2 we have relied upon certificates or comparable documents of officers and representatives of the Company. Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that the Shares have been duly authorized, and, when issued and paid for as contemplated by the Standby Agreement relating to the Shares, will be validly issued, fully paid and non-assessable. The opinions expressed herein are limited to the laws of the State of New York, the corporate laws of the State of Delaware and the federal laws of the United States, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction. We hereby consent to all references to our firm included in the Registration Statement and to any and all references to our firm in the Prospectus which is a part of the Registration Statement. Very truly yours, /s/ Weil, Gotshal & Manges LLP Weil, Gotshal & Manges LLP EX-23 5 0005.txt 23.1 Exhibit 23.1 ------------ CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 15, 2000 included in SEACOR SMIT Inc.'s Form 10-K for the year ended December 31, 1999 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP - ----------------------- ARTHUR ANDERSEN LLP New Orleans, Louisiana, January 18, 2001 -----END PRIVACY-ENHANCED MESSAGE-----