EXHIBIT 4.26
SUBSIDIARY PLEDGE AGREEMENT
AGREEMENT dated as of December 21, 1995 between Global Marine
International Services Corporation, a Bahamian corporation (with
its successors, the "Company"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee under the Indenture
referred to herein (with its successors in such capacity, the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company is a Subsidiary of Global Marine Inc.
(the "Issuer"); and
WHEREAS, the Issuer has heretofore executed and delivered to
the Trustee an Indenture dated as of December 23, 1992 (the
"Indenture"), providing for the issuance of $225,000,000 aggregate
principal amount of the Issuer's 12 3/4% Senior Secured Notes Due
1999 (the "Notes"); and
WHEREAS, Section 1017 of the Indenture provides that upon the
designation by the Issuer of a Subsidiary as a "Restricted
Subsidiary" in accordance with clause (ii) of the definition of
the term "Unrestricted Subsidiary" the Issuer shall cause such
Subsidiary to execute and deliver to the Trustee a Subsidiary
Pledge Agreement; and
WHEREAS, simultaneous with the execution of this Subsidiary
Pledge Agreement by the Company, the Issuer has designated the
Company as a "Restricted Subsidiary" in accordance with clause
(ii) of the definition of the term "Unrestricted Subsidiary"; and
WHEREAS, the Company will receive substantial direct and
indirect benefit from the Issuer's issuance and sale of the Notes;
NOW THEREFORE, in consideration of the premises and in order
to comply with Section 1017 of the Indenture, the Company hereby
agrees as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Indenture. The
following terms, as used herein, have the following respective
meanings:
"Board of Directors" means, with respect to any Person,
either the board of directors of such Person, or any duly
authorized committee of such board.
"Board Resolution" means, with respect to the Board of
Directors of any Person, a copy of a resolution certified by the
Secretary or an Assistant Secretary of such Person to have been
duly adopted by such Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the
Trustee.
"Cash Collateral Account" has the meaning set forth in
Section 5(A) hereof.
"Collateral" has the meaning set forth in Section 3 hereof.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the
Board, its President, a Vice Chairman or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC) including, but
not limited to, promissory notes, drafts, bills of exchange and
trade acceptances, now owned or hereafter acquired by the Company.
"Liquid Investments" has the meaning set forth in Section
5(E) hereof.
"Non-cash Consideration" means any non-cash Proceeds of any
Asset Sale by the Company of a Mortgaged Vessel.
"Proceeds" means all proceeds of, and all other profits,
income or receipts, in whatever form, arising from the ownership,
collection, sale, exchange, assignment or other disposition of, or
realization upon, Collateral, including without limitation all
claims of the Company against third parties for loss of, or for
proceeds payable under, or unearned premiums with respect to, any
Collateral, and all interest, dividends (cash or otherwise) and
other payments and distributions on or with respect to the
Collateral or in exchange for the Collateral, in each case whether
now existing or hereafter arising.
"Secured Obligations" means the obligations secured under
this Agreement including (a) the obligations of the Issuer under
the Indenture and under the Notes, whether in respect of
principal, premium, interest (including Defaulted Interest, and
whether or not accruing after commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency or
reorganization of the Issuer) or otherwise, (b) the obligations of
the Company hereunder, and (c) any renewals or extensions of any
of the foregoing; PROVIDED, HOWEVER, that the amount of such
Secured Obligations shall be deemed to be limited to that amount
which would not render the pledge hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"Subsidiary" means a subsidiary of the Company.
"Subsidiary Shares" means all shares of capital stock or
other evidences of ownership in any subsidiary, other than a Non-Recourse
Subsidiary, of the Issuer (now or hereafter existing) from time to time
owned or acquired by the Company in any manner, the certificates, if any,
representing such shares or other evidences of ownership, and any shares
of capital stock, warrants, rights or options to acquire such shares, or
any security convertible into or exchangeable for such shares or any other
Instrument or property received or receivable as a distribution or
a dividend thereon or exchanged or exchangeable therefor.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York; PROVIDED that if by reason
of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the Security Interest in any
Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or
effect of perfection or non-perfection.
Unless otherwise defined herein or in the Indenture, or
unless the context otherwise requires, all terms used herein which
are defined in the UCC shall have the meanings therein stated.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Trustee and for
the benefit of each Holder as follows:
(A) CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
(B) CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the
Company of this Agreement (i) is within the Company's corporate powers,
(ii) has been duly authorized by all necessary corporate action, requires no
action by or in respect of, or filing with, any governmental body, agency
or official (other than any actions or filings required pursuant
to Section 4(H) hereof ), (iii) does not contravene, or constitute
a default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Company or
of any agreement, judgment, injunction, order, decree or other
instrument binding thereon or (iv) result in the creation or
imposition of any Lien on any asset of the Company other than the
Lien of this Agreement.
(C) BINDING EFFECT. This Agreement constitutes a valid
and binding agreement of the Company, enforceable in accordance
with its terms.
(D) LITIGATION. There is no action, suit,
investigation, litigation or proceeding affecting the Company or
any Subsidiary thereof pending or threatened before any domestic
or foreign court, governmental agency or other governmental body,
official or arbitrator that in any manner draws into question the
validity of this Agreement, the enforceability of the Security
Interests or the consummation of the transactions contemplated
hereby.
(E) COLLATERAL. The Company has good title to all of
the Collateral free and clear of any Liens other than the Lien of
this Agreement.
(F) ENFORCEMENT PERFECTION. The Company has not
performed any acts which might prevent the Trustee from enforcing
any of the terms of this Agreement or which would limit the
Trustee in any such enforcement. No financing statement,
mortgage, security agreement or similar or equivalent document,
instrument or notation covering all or any part of the Collateral
is on file or of record in any jurisdiction in which such filing
or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person
(other than the Company) asserting any claim thereto or security
interest therein, except that the Trustee or its designee may have
possession of Collateral as contemplated hereby.
(G) VALIDITY, PERFECTION AND PRIORITY OF SECURITY
INTERESTS. This Agreement duly creates, for the benefit of the
Trustee and the Holders, valid Security Interests in the
Collateral under the UCC, which by its terms this Agreement
purports to create. Upon the delivery of the Instruments (to the
extent required to be delivered hereunder) and certificates
representing Subsidiary Shares to the Trustee in accordance with
Section 4 hereof, the Trustee will have valid and perfected
Security Interests therein subject to no prior Lien. Other than
the foregoing, no registration, recordation or filing with or
notice to any governmental body, agency or official, or any other
action, is required in connection with the execution or delivery
of this Agreement or necessary for the validity or enforceability
hereof or for the perfection of the Security Interests.
SECTION 3. THE SECURITY INTERESTS.
(A) In order to secure the full and punctual payment of
the Secured Obligations in accordance with the terms thereof and
to secure the performance of all of the obligations of the Company
hereunder, the Company hereby irrevocably grants, assigns, pledges
and transfers to the Trustee for the ratable security and benefit
of the Holders a continuing security interest in and to and lien
on all of the right, title and interest of the Company in, to and
under all of the following property of the Company, whether now
owned or existing or hereafter acquired or arising and regardless
of where located (all being collectively referred to as the
"Collateral"):
(1) Subsidiary Shares;
(2) Instruments received by the Company as
Noncash Consideration;
(3) cash Proceeds of any Asset Sale by the
Company of a Mortgaged Vessel;
(4) the Cash Collateral Account, all cash
deposited therein from time to time, the
Liquid Investments made pursuant to Section
5(E) hereof and other rights, monies and
property in the possession or under the
control of the Trustee; and
(5) all Proceeds of all or any of the Collateral
described in clauses (1) through (5) hereof.
(B) The Security Interests are granted as security only
and not a transfer of title and shall not subject the Trustee or
any Holder to, or transfer or in any way affect or modify, any
obligation or liability of the Company or any Subsidiary of the
Company with respect to any of the Collateral or any transaction
in connection therewith.
SECTION 4. FURTHER ASSURANCES; COVENANTS.
(A) (i) The Company will, on or prior to the third day
after the related Asset Sale, deliver and pledge to the Trustee
any Instrument acquired by the Company at any time as Non-cash
Consideration, appropriately endorsed to the Trustee, PROVIDED
that, pending such delivery, the Company shall hold such
Instruments in trust for the Trustee and the Holders, and PROVIDED
FURTHER that the Trustee may, upon request of the Company, make
appropriate arrangements for making any Instrument pledged by the
Company available to it for purposes of presentation, collection
or renewal (any such arrangement to be effected, to the extent
deemed appropriate to the Trustee, against trust receipt or like
document); SUBJECT, HOWEVER, to the Security Interest in such
Instruments and the Proceeds thereof;
(ii) the Company will immediately deliver and
pledge to the Trustee certificates or other instruments acquired
by it at any time representing Subsidiary Shares;
(iii)all Instruments required under clause (i) of
this subsection (A) to be delivered to the Trustee shall be so
delivered by the Company pursuant hereto endorsed in suitable form
for transfer by endorsement and delivery by the Trustee, and
accompanied by any required transfer tax stamps, all in form and
substance satisfactory to the Trustee; and all certificates or
other instruments representing Subsidiary Shares delivered to the
Trustee by the Company pursuant hereto shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, and accompanied by
any required transfer tax stamps, all in form and substance
satisfactory to the Trustee; and
(iv) the Company will promptly give to the Trustee
copies of any notices or other communications received by it with
respect to Subsidiary Shares registered in the name of the Company
and the Trustee will promptly give to the Company copies of any
notices and communications received by the Trustee with respect to
Subsidiary Shares registered in the name of the Trustee or its
nominee.
(B) Except as otherwise provided in this subsection
(B), the Company shall continue to enforce, at its own expense,
any and all obligations of any Persons to it arising out of
Instruments received as Non-cash Consideration and shall continue
to collect, at its own expense, all amounts due, if any, or to
become due, that arise out of such Instruments and to pay over or
deposit such amounts in accordance with Section 5(C) hereof;
PROVIDED, HOWEVER, that the Trustee shall have the right at any
time, and from time to time, upon the occurrence and during the
continuance of a Default, to direct the obligors to the Company
under such Instruments to make payment of all amounts or other
property due or to become due to the Company thereunder directly
to the Trustee and, at the expense of the Company, to enforce such
Instruments, and to adjust, settle or compromise the amount or
payment thereof, if any, in the same manner and to the same extent
as the Company might have done.
(C) Upon the occurrence and during the continuance of a
Default, the Company will promptly notify (and hereby authorizes
the Trustee so to notify) each account debtor in respect of any
Instrument received as Non-cash Consideration that such Collateral
has been assigned to the Trustee hereunder, and that any payments
due or to become due in respect of such Collateral are to be made
directly to the Trustee or its designee.
(D) The Company will not (i) create, incur or suffer to
exist any Lien with respect to any Collateral other than the Lien
of the Security Documents and Permitted Collateral Liens, or (ii)
effect any Asset Sale with respect to any Collateral except as
permitted under Section 1013 of the Indenture.
(E) The Company will, promptly upon request, provide to
the Trustee all information and evidence it may reasonably request
concerning the Collateral and any other information the Trustee
may reasonably request to enable the Trustee to enforce the
provisions of this Agreement.
(F) The Company shall comply, in all material respects,
with all acts, rules, regulations, orders, decrees and directions
of any court or governmental instrumentality applicable to the
Collateral.
(G) The Company will deliver to the Trustee a copy of
each material demand, notice or document received by it relating
in any way to the Collateral if failure to so deliver might
adversely affect the Trustee's ability to safeguard the Security
Interest in such Collateral.
(H) At any time and from time to time, upon the request
of the Trustee, and at the sole expense of the Company, the
Company will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
Trustee may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the UCC
with respect to the Security Interests created hereby. The
Company also hereby authorizes the Trustee to file any such
financing or continuation statement without the signature of the
Company to the extent permitted by applicable law.
(I) If any new Subsidiary of the Company (other than a
Non-Recourse Subsidiary, so long as it remains such) is
established or acquired, or the Company designates a Subsidiary as
a "Restricted Subsidiary" in accordance with clause (ii) of the
definition of the term Unrestricted Subsidiary in the Indenture,
the Company shall cause such Subsidiary to execute and deliver to
the Trustee an agreement in substantially the form of this
Subsidiary Pledge Agreement and, if such new Subsidiary owns any
Subsidiary Shares, to deliver and pledge to the Trustee pursuant
to such agreement the certificates or other instruments
representing all such Subsidiary Shares, in the form required by
such agreement, and free of all Liens other than the Lien of such
agreement. For purposes of this subsection (J), if the Subsidiary
Shares being pledged are the Capital Stock of a Subsidiary
organized under the laws of a jurisdiction other than the United
States, a State thereof or the District of Columbia, the
Subsidiary Pledge Agreement with respect thereto shall be
substantially in the form of this Subsidiary Pledge Agreement,
with such changes therein (which shall be satisfactory to the
Trustee), as are required by the law of the jurisdiction in which
such Subsidiary is organized in order to grant a security interest
in such Capital Stock comparable to that provided for in this
Subsidiary Pledge Agreement, as evidenced by an Opinion of Counsel
(which shall also address the validity of such agreement and the
creation and perfection of such security interest).
SECTION 5. CASH COLLATERAL ACCOUNT; DISTRIBUTIONS ON
COLLATERAL.
(A) There is hereby established by the Trustee a cash
collateral account, subject to such applicable laws and such
applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or
governmental authority as may now hereafter be in effect (the
"Cash Collateral Account"), in the name and under the sole
dominion and control of the Trustee. The Company shall deposit
from time to time into the Cash Collateral Account all Net
Available Proceeds of an Asset Sale by the Company of any
Collateral or any Mortgaged Vessel. Any income received by the
Trustee with respect to the balance from time to time standing to
the credit of the Cash Collateral Account, including any interest
or capital gains on Liquid Investments, shall remain, or be
deposited, in the Cash Collateral Account. All right, title and
interest in and to the cash amounts on deposit from time to time
in the Cash Collateral Account together with any Liquid
Investments from time to time made pursuant to subsection (E) of
this Section 5 shall vest in the Trustee, shall constitute part of
the Collateral hereunder and shall not constitute payment of the
Secured Obligations until applied thereto as hereinafter provided.
(B) Except as otherwise provided by the provisions of
subsection (D) of this Section 5 or of Section 10 hereof or
Section 1013 of the Indenture, no amount (including interest on
amounts on deposit in the Cash Collateral Account) shall be paid
or released to or for the account of, or withdrawn by or for the
account of, the Company or any other Person from the Cash
Collateral Account.
(C) Except as specified in subsection (G) of this
Section 5, the Trustee shall have the right to receive and retain
as Collateral hereunder all dividends, interest and other payments
and distributions made upon or with respect to the Collateral and
the Company shall take all such action as the Trustee may deem
necessary or appropriate to give effect to such right. All such
dividends, interest and other payments and distributions which are
received by the Company shall be received in trust for the benefit
of the Trustee and the Holders and shall be paid over to the
Trustee as Collateral in the same form as received (with any
necessary endorsement). The Company shall deposit any such
dividends, interest and other payments and distributions that are
in the form of cash into the Cash Collateral Account.
(D) Except as provided in subsection (G) of this
Section 5, any distributions or other Proceeds of the Collateral
received by the Trustee and the balance from time to time standing
to the credit of the Cash Collateral Account shall be released to
the Company only as permitted under Section 1013 of the Indenture;
PROVIDED that the Trustee shall not distribute or release to the
Company any such Collateral upon the occurrence and continuation
of a Default. If the Notes have been declared, or have become,
due and payable and such declaration and its consequences have not
been rescinded or annulled, the Trustee may, in accordance with
Section 505 of the Indenture or as otherwise permitted herein,
apply or cause to be applied (subject to collection) any or all of
the balance from time to time standing to the credit of the Cash
Collateral Account in the manner specified in Section 10 hereof.
(E) Amounts on deposit in the Cash Collateral Account
shall be invested and reinvested from time to time in such Liquid
Investments as the Company shall instruct the Trustee to invest
in, provided that such instruction shall be in writing; PROVIDED,
HOWEVER, that, if a Default shall have occurred and be continuing,
the Trustee shall have the exclusive right to make investment
decisions with respect to amounts on deposit in the Cash
Collateral Account. Such Liquid Investments shall be held in the
name and be under the sole dominion and control of the Trustee,
subject to subsection (D) of this Section 5. "Liquid Investments"
means such Permitted Investments as are described in clauses (a),
(b), (c) and (d) of the definition of that term in the Indenture;
PROVIDED, HOWEVER, that in order to provide the Trustee, for the
benefit of the Holders, with a perfected security interest
therein, each Liquid Investment, or, in the case of the Permitted
Investments described in clause (d) of the definition of that
term, each security which is the subject of a repurchase
obligation, shall be either:
(a) evidenced by negotiable certificates or
instruments, or if non-negotiable then issued in the
name of the Trustee, which (i) are delivered (together
with any appropriate instruments of transfer) to, and
held by, the Trustee or an agent thereof (which shall
not be the Company or any of its Affiliates) in the
State of Delaware or (ii) held by or on behalf of the
Depositary Trust Company or the Participants Trust
Company (each a "Clearing Corporation") and credited to
a securities account of the Trustee maintained with such
Clearing Corporation; or
(b) maintained in book-entry form on the records
of a Federal Reserve Bank and registered in the name of
the Trustee, as depositary, in a book-entry securities
account maintained with respect to such Liquid
Investment with the Federal Reserve Bank in the Federal
Reserve District in which the Trustee's Corporate Trust
Office is located.
The Company shall bear the risk of any realized losses
incurred on Liquid Investments, and if any such realized loss
shall occur on a day when the Company would not be permitted
pursuant to subsection (D) of this Section 5 to withdraw monies
from its Cash Collateral Account, the Company shall promptly remit
an amount equal to the amount of any such loss to the Trustee for
credit to the Cash Collateral Account.
(F) If immediately available cash on deposit in the
Cash Collateral Account is not sufficient to make any permitted
distribution to the Company, the Trustee shall liquidate as
promptly as practicable Liquid Investments as required to obtain
sufficient cash to make such distribution and, notwithstanding any
other provision of this Section 5, such distribution shall not be
made until such liquidation has taken place.
(G) Unless a Default shall have occurred and be
continuing, the Company shall have the right to receive any
dividends on the Subsidiary Shares in the form of cash or
property, but not any dividends in the form of Instruments or
additional Subsidiary Shares; PROVIDED that until the Trustee has
received a certificate signed by an authorized officer of the
Company stating (i) the source, type and amount of such dividend
and (ii) that no Default has occurred and is continuing, such
dividend will be held by the Company in trust for the benefit of
the Trustee and the Holders. If a Default shall have occurred and
be continuing, the Company shall pay over or deposit any such
dividends as provided by subsection (C) of this Section 5 or, in
the case of dividends in the form of property, take any action
necessary to perfect the Trustee's Security Interest therein as
provided by Section 4(H) hereof.
SECTION 6. RIGHT TO VOTE SUBSIDIARY SHARES.
Unless an Event of Default shall have occurred and be
continuing, the Company shall have the right, from time to time,
to vote and give consents, ratifications and waivers with respect
to the Subsidiary Shares. If an Event of Default shall have
occurred and be continuing, the Trustee shall have the right to
the extent permitted by law and the Company shall take all such
action as may be necessary or appropriate to give effect to such
right, to vote and to give consents, ratifications or waivers, and
take any other action with respect to any or all of the Subsidiary
Shares with the same force and effect as if the Trustee were the
sole and absolute owner thereof, including, without limitation,
causing the registration thereof in the name of the Trustee.
SECTION 7. POWER OF ATTORNEY.
The Company hereby irrevocably appoints the Trustee its
true and lawful attorney, with full power of substitution, in the
name of the Company, the Trustee, the Holders or otherwise, for
the sole use and benefit of the Trustee and the Holders, but at
the Company's expense, to exercise, to the extent permitted by
law, any and all rights and remedies provided under this
Agreement, at any time and from time to time while an Event of
Default has occurred and is continuing.
SECTION 8. REMEDIES UPON EVENT OF DEFAULT.
(A) If the Notes have been declared, or have become,
due and payable and such declaration and its consequences have not
been rescinded and annulled, the Trustee may, after notice to the
Holders, and shall, upon direction by the Holders of not less than
25 percent in principal amount of Outstanding Notes, exercise on
behalf of the Holders all rights of a secured party under the UCC
(to the extent permitted by law, whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition,
the Trustee may, without being required to give any notice, except
as herein provided or as may be required by mandatory provisions
of law: (i) withdraw all cash and Liquid Investments in the Cash
Collateral Account and apply such monies, Liquid Investments and
other cash, if any, then held by it as Collateral as specified in
Section 10 hereof and (ii) if there shall be no such monies,
Liquid Investments or cash or if such monies, Liquid Investments
or cash shall be insufficient to pay all the Secured Obligations
in full, sell the Collateral or any part thereof at public or
private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at
such price or prices as the Trustee may deem satisfactory. The
Trustee, or any Holder may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of
a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price
quotations, or if otherwise permitted by applicable law, at any
private sale). The Trustee is authorized, in connection with any
such sale, if it deems it advisable so to do, to impose such
limitations or conditions in connection with any such sale as the
Trustee deems necessary or advisable in order to comply with the
UCC or any other law. The Trustee is authorized, in connection
with any such sale, if it deems it advisable to do so, (i) to
restrict the prospective bidders on or purchasers of any of the
Subsidiary Shares to a limited number of sophisticated investors
who will represent and agree that they are purchasing for their
own account for investment and not with a view to the distribution
or sale of any of such Subsidiary Shares, (ii) to cause to be
placed on certificates for any or all of the Subsidiary Shares or
any other securities pledged hereunder a legend to the effect that
such security has not been registered under the Securities Act of
1933 and may not be disposed of in violation of the provision of
said Act, and (iii) to impose such other limitations or conditions
in connection with any such sale as the Trustee deems necessary or
advisable in order to comply with said Act or any other law. The
Company covenants and agrees that it will execute and deliver such
documents and take such other action as the Trustees deems
necessary or advisable in order that any such sale may be made in
compliance with applicable law. Upon any such sale the Trustee
shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. In order to ratify and
confirm any such sale the Company will, upon the request of the
Trustee or any such purchaser, execute and deliver thereto all
instruments of assignment, conveyance or transfer and release as
may be designated in such request. Each purchaser at any such
sale shall hold the Collateral so sold to it absolutely and free
from any claim or right of whatsoever kind, including any equity
or right of redemption of the Company which may be waived, and the
Company, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The
receipt given by the Trustee or by the officer making such sale
under judicial proceedings shall be a sufficient discharge to any
purchaser for its purchase money, and, after paying such purchase
money and receiving such receipt, such purchaser or its personal
representatives or assigns shall not be obliged to see the
application of such purchase money, or be in any way answerable
for any loss, misapplication or the non-application thereof.
(B) To the extent the Trustee is obligated by law to
provide notice, the notice (if any) shall (i) in case of a public
sale, state the time and place fixed for such sale, (ii) in the
case of a sale at any broker's board or on a securities exchange,
state the board or exchange at which sale is to be made and the
day on which the Collateral, or the portion thereof being so sold,
will first be offered for sale at such board or exchange and (iii)
in the case of a private sale, state the day after which such sale
may be consummated. In the event any such notice is required to
be given, the Trustee shall give the Company not less than ten
days' prior written notice of the time and place of any sale or
other intended disposition of any of its Collateral. The Company
agrees that such notice constitutes "reasonable notification"
within the meaning of Section 9-504(3) of the UCC. Any such public
sale shall be held at such time or times within ordinary business
hours and at such place or places as the Trustee may fix in the
notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Trustee
may determine. The Trustee shall not be obligated to make any
such sale pursuant to any such notice. The Trustee may, without
notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at
any time or place to which the same may be so adjourned. In case
of any sale of all or any part of the Collateral on credit or for
future delivery, the Collateral so sold may be retained by the
Trustee until the selling price is paid by the purchaser thereof,
but the Trustee shall not incur any liability in case of the
failure of such purchaser to take up and pay for the collateral so
sold and, in case of any such failure, such Collateral may again
be sold upon like notice. The Trustee, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and
sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(C) For the purpose of exercising any and all rights
and remedies under this Agreement, the Trustee may (i) require the
Company to, and the Company agrees that it will, at its expense
and upon the request of the Trustee, forthwith assemble all or any
part of the Collateral as directed by the Trustee and make it
available at a place designated by the Trustee which is in its
opinion, reasonably convenient to the Trustee and the Company
whether at the premises of the Company or otherwise; (ii) to the
extent permitted by applicable law, enter, with or without process
of law and without breach of the peace, any premise where any of
the Collateral is or may be located, and without charge or
liability to it seize and remove such Collateral from such
premises; and (iii) have access to and use of the Company's books
and records relating to the Collateral.
(D) The Trustee may exercise any and all rights and
remedies of the Company under or in connection with any obligation
owing to the Company in respect of the Collateral, including,
without limitation, any and all rights of the Company to demand or
otherwise require payment of any amount under any obligation owing
to the Company in respect of the Collateral.
(E) In addition to and without limiting the foregoing,
the Trustee may utilize all or any of the following powers with
respect to all or any of the Collateral, at any time and from time
to time while an Event of Default has occurred and is continuing:
(i) demand, xxx for, collect, receive and give
acquittance for any and all monies due or to
become due thereon or by virtue thereof;
(ii) settle, compromise, compound, prosecute or
defend any action or proceeding with respect
thereto;
(iii)if the Notes have been declared, or have
become, due and payable and such declaration and
its consequences have not been rescinded and
annulled, sell, transfer, assign or otherwise deal
in or with the same or the proceeds or avails
thereof, as fully and effectually as if the
Trustee were the absolute owner thereof; and
(iv) extend the time of payment of any or all
thereof and make any allowance and other
adjustments with reference thereto.
SECTION 9. LIMITATION ON DUTY OF TRUSTEE IN RESPECT
OF COLLATERAL; INDEMNIFICATION.
(A) Beyond the exercise of reasonable care in the
custody thereof, the Trustee shall have no duty as to any
Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other rights
pertaining thereto. The Trustee shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession
if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or
responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier,
forwarding agency, or other agent or bailee selected by the
Trustee in good faith.
(B) The Trustee undertakes to perform such duties and
only such duties as are specifically set forth herein, and no
implied covenants or obligations shall be read into this Agreement
against the Trustee.
(C) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement.
(D) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 9.
(E) The Company agrees to indemnify the Trustee and its
officers, directors, employees and agents from and against any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, but not limited to,
expenses allocable to internal counsel of the Trustee) or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Trustee in any
way relating to or arising out of any Collateral or any action
taken or omitted by the Trustee with respect to the Collateral,
PROVIDED that the Company shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever resulting from the negligence or bad
faith of the Trustee and its officers, directors, employees and
agents as determined by a court of competent jurisdiction.
Without limiting the generality of the foregoing, the Company
agrees to reimburse the Trustee promptly upon demand for any out-of-pocket
expenses (including reasonable counsel fees) incurred by
the Trustee in connection with the preparation, execution,
delivery, modification, amendment, administration, or enforcement
(whether through negotiations, legal proceedings or otherwise), or
legal advice in respect of rights or responsibilities with respect
to the Collateral. Notwithstanding the foregoing, nothing in this
subsection (E) shall be construed to limit the effect of
subsection (B) or (C) of this Section 9.
(F) In making the withdrawals and payments required by
Section 5(D) hereof, the Trustee shall act in accordance with the
instructions of the Company received by it under Section 5(D)
hereof and shall be fully protected in relying thereon.
(G) The Trustee shall be under no liability for
interest or any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 10. APPLICATION OF PROCEEDS.
If an Event of Default shall have occurred and be
continuing and if the Notes have been declared, or have become,
due and payable and such declaration and its consequences have not
been rescinded and annulled, the Proceeds of all or any part of
the Collateral and cash in the Cash Collateral Account shall be
applied by the Trustee in the following order of priorities:
FIRST, to payment of the expenses of any sale or other
realization made or concluded pursuant to Section 8 hereof,
including reasonable compensation to agents and counsel for the
Trustee, and all expenses, liabilities and advances incurred or
made by the Trustee in connection therewith, and any other
unreimbursed expenses for which the Trustee is to be reimbursed
pursuant to Section 13 hereof, and unpaid fees owing to the
Trustee under the Indenture;
SECOND, to the payment of amounts then due and unpaid
for principal of (and premium, if any) and interest on the Notes,
ratably, without preference or priority of any kind, according to
the amounts due and payable on such Notes for principal (and
premium, if any) and interest, respectively;
THIRD, to the payment of the remainder, if any, to the
Company or to whosoever may be lawfully entitled thereto or as a
court of competent jurisdiction may direct.
The Trustee may make distributions hereunder in cash or in kind
or, on a ratable basis, in any combination thereof.
SECTION 11. CONCERNING THE TRUSTEE.
In furtherance and not in derogation of the rights,
privileges and immunities of the Trustee set forth in Article Six
of the Indenture (all of which shall apply as if set forth
herein):
(A) The Trustee is authorized to take all such action
as is provided to be taken by it as Trustee hereunder and all
other action reasonably incidental thereto. As to any matters not
expressly provided for herein (including, without limitation, the
timing and methods of realization upon the Collateral), the
Trustee shall act in accordance with the provisions of the
Indenture.
(B) All rights of action and claims under this
Agreement in respect of obligations evidenced by all Instruments
may be prosecuted and enforced by the Trustee without the
possession thereof or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the
Trustee shall be instituted in its own name as the secured party
hereunder for the benefit of the Holders in accordance with this
Agreement.
(C) The Trustee shall not be responsible for the
existence, genuineness or value of any of the Collateral or for
the validity, perfection, priority or enforceability of the
Security Interests in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on
its part hereunder. The Trustee shall have no duty to ascertain
or inquire as to the performance or observance of any of the terms
of this Agreement by the Company.
(D) Except as otherwise provided in Section 9:
(i) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness, or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(ii) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order and any resolution of the Board of
Directors of any Person shall be sufficiently evidenced by a Board
Resolution;
(iii) whenever in the administration of this
Agreement the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(iv) the Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(v) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(vi) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(vii) no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, EXCEPT that (a) this subsection (vii) shall
not be construed to limit the effect of subsection (i) of this
Section 11 or subsection (B) of Section 9 hereof; (b) the Trustee
shall not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and (c)
the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
principal amount of the Outstanding Notes relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(viii) the Trustee may become the owner or pledgee
of Notes, and, subject to Sections 608 and 614 of the Indenture,
may otherwise deal with the Company with the same rights it would
have if it were not Trustee; and
(ix) the recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for their correctness; the Trustee makes no
representations with respect to the Collateral or as to the
validity or sufficiency of this Agreement.
SECTION 12. APPOINTMENT OF CO-TRUSTEES.
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Trustee may appoint another
bank or trust company or one or more other persons, either to act
as co-trustees or co-trustee, jointly with the Trustee, or to act
as separate trustee or trustees on behalf of the Holders with such
power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the
Trustee, include provisions for the protection of such co-trustee
or separate trustee similar to the provisions of Sections 9 and 11
hereof).
SECTION 13. EXPENSES.
In the event that the Company fails to comply with the
provisions of this Agreement such that the value of any Collateral
or the validity, perfection, rank or value of any Security
Interest is thereby diminished or potentially diminished or put at
risk, the Trustee may, but shall not be required to, effect such
compliance on behalf of the Company, and the Company shall
reimburse the Trustee for the costs thereof on demand. All
expenses of protecting, storing, insuring, handling, and shipping
the Collateral, any and all excise, property, sales, and use taxes
imposed by any state, federal, or local authority on any of the
Collateral, or expenses in respect of (i) the sale or other
disposition thereof, (ii) the administration or enforcement of
this Agreement, (iii) the exercise by the Trustee of any of the
rights conferred upon it hereunder, including, without limitation,
the preservation of the validity, perfection, rank or value of any
Security Interest or (iv) any Default or Event of Default, shall
be borne and paid by the Company; and if the Company fails to
promptly pay any portion of such expenses when due, the Trustee
may, at its option, but shall not be required to, pay the same and
charge the Company's account therefor, and the Company agrees to
reimburse the Trustee therefor on demand. All sums so paid or
incurred by the Trustee for any of the foregoing and any and all
other sums for which the Company may become liable hereunder and
all costs and expenses (including attorneys' fees, legal expenses
and court costs) reasonably incurred by the Trustee in enforcing
or protecting the Security Interests or any of its rights or
remedies under this Agreement, shall, together with interest
thereon until paid at the rate applicable to the Notes, be
additional Secured Obligations hereunder.
SECTION 14. TERMINATION OF SECURITY
INTERESTS; RELEASE OF COLLATERAL.
Upon the payment in full by the Issuer of all of the
Secured Obligations, the Security Interests shall terminate and
all rights to the Collateral shall revert to the Company. At any
time and from time to time prior to such termination of the
Security Interests, the Trustee may release any of the Collateral
as provided in Section 1013 of the Indenture or with the consent
of the Holders of not less than 66 2/3% in principal amount of
Outstanding Notes, or as otherwise provided in Section 401 of the
Indenture. Upon any such termination of the Security Interests or
release of Collateral, the Trustee will, at the expense of the
Company, release over to the Company any Collateral remaining in
the Trustee's possession and execute and deliver to the Company
such documents as the Company shall reasonably request to evidence
the termination of the Security Interest or the release of such
Collateral, as the case may be.
SECTION 15. CORPORATE EXISTENCE.
Subject the rights granted to the Issuer under Section
801 of the Indenture, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the
corporate existence, rights (charter and statutory) and franchises
of the Company and each Subsidiary; PROVIDED, HOWEVER, that the
Company and any Subsidiary shall not be required to preserve any
right or franchise if the Board of Directors of the Issuer shall
determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the
Holders.
SECTION 16. NOTICES.
Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
(A) the Trustee shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, 1100 North
Market Street, Xxxxxx Square North, Xxxxxxxxxx, Xxxxxxxx
00000, to the attention of the Corporate Trust
Administration, or
(B) the Company shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, or sent via
facsimile transmission to the Company addressed to it at the
address or facsimile number set forth in the signature page
hereof, or at any other address previously furnished in
writing to the Trustee by the Company, Attention: Secretary.
SECTION 17. WAIVERS, NON-EXCLUSIVE REMEDIES.
No failure on the part of the Trustee to exercise, no
delay in exercising and no course of dealing with respect to, any
right under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise by the Trustee of any right
under the Indenture or this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The
rights in this Agreement are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 18. SUCCESSOR TRUSTEE.
Upon acceptance of appointment as successor Trustee
under the Indenture, such successor Trustee shall thereupon
succeed to and become vested with all the rights and duties of the
retiring Trustee, and the retiring Trustee shall be discharged
from its duties and obligations hereunder. After any retiring
Trustee's resignation hereunder as Trustee, the provisions of
Section 9 and 11 hereof shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was a Trustee.
SECTION 19. SUCCESSORS AND ASSIGNS.
This Agreement is for the benefit of the Trustee and
Holders and their successors and assigns. This Agreement shall be
binding on the Company and its successors and may not be assigned
thereby without the prior written consent of the Trustee with the
consent of the Holders of not less than 66 2/3% in aggregate
principal amount of Outstanding Notes.
SECTION 20. CHANGES IN WRITING.
(A) Without the consent of any of the Holders, the
Company and the Trustee, at any time and from time to time, may
enter into one or more amendments hereof, in form satisfactory to
the Trustee, for any of the following purposes:
(i) to evidence the succession of another Person
to the Company and the assumption by such successor of the
covenants of the Company herein; or
(ii) to add to the covenants of the Company, for
the benefit of the Holders of all the Notes, or to surrender any
right or power herein conferred upon the Company; or
(iii)to change or eliminate any of the provisions
of this Agreement, PROVIDED that any such change or elimination
shall become effective only when there is no Note Outstanding
created prior to the execution of such amendment which is entitled
to the benefit of such provision; or
(iv) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee and to add to or
change any of the provisions of this Agreement as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 611(b) of the Indenture; or
(v) to cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with any
other provision herein or to make any other provisions with
respect to matters or questions arising under this Agreement,
PROVIDED such actions shall not adversely affect the interests of
the Holders in any material respect.
(B) (i) With the consent of the Holders of not less
than a majority in principal amount of the Outstanding Notes, by
Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into one or more amendments hereof for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders; PROVIDED, HOWEVER, that no such
amendment shall, without the consent of the Holders of not less
than 66 2/3 percent in principal amount of the Outstanding Notes,
change in any manner or eliminate any provision of this Agreement
creating or providing for the creation of a Lien on any of the
Collateral, or release the Lien on any Collateral otherwise than
as provided herein or in the Indenture; and PROVIDED, FURTHER,
that no such amendment shall, without the consent of the Holder of
each Outstanding Note, modify any of the provisions of this
Section, except to provide that certain other provisions of this
Agreement cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby; PROVIDED,
HOWEVER, that this subsection (8) shall not be deemed to require
the consent of any Holder with respect to changes in references to
"the Trustee" and concomitant changes in this Section, in
accordance with the requirements of clause (v) of subsection (A)
of this Section or the deletion of this proviso.
(ii) It shall not be necessary for any Act of
Holders under this subsection (8) to approve the particular form
of any proposed amendment, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 21. NEW YORK LAW.
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent
that remedies provided by the laws of any jurisdiction other than
New York are governed by the laws of such jurisdiction. The
Company hereby irrevocably submits to the nonexclusive
jurisdiction of the United States District Court for the Southern
District of New York and of any New York State Court sitting in
New York City for purposes of all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated
hereby. The Company irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 22. SEVERABILITY.
If any provision hereof is invalid and unenforceable in
any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in
favor of the Trustee and the Holders in order to carry out the
intentions of the parties hereto as nearly as may be possible, and
(ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.
SECTION 23. COUNTERPARTS; INTEGRATION.
This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to
the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
GLOBAL MARINE INTERNATIONAL
SERVICES CORPORATION
By: /s/ Xxxxx X. XxXxxxxxx
Name: Xxxxx XxXxxxxxx
Title: Vice President
Address: c/o Global Marine Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
WILMINGTON TRUST COMPANY,
as Trustee
By: /S/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
