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EXHIBIT 4.2
GLOBAL MARINE INC.
$300,000,000 7 1/8% NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
September 10, 1997
Salomon Brothers Inc
BT Alex. Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Global Marine Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Initial Purchasers") $300,000,000 principal amount
of its 7 1/8% Notes Due 2007 (the "Securities"), to be issued under an
indenture (the "Indenture") to be dated as of September 1, 1997, between the
Company and Wilmington Trust Company, as trustee (the "Trustee").
The sale of the Securities to you will be made without registration of the
Securities under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon exemptions from the registration requirements of the
Securities Act. You have advised the Company that you will offer and sell the
Securities purchased by you hereunder in accordance with Section 4 hereof on
the terms set forth in the Final Memorandum (as defined below), as soon as you
deem advisable after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated September 1, 1997 (the "Preliminary
Memorandum"), and a final offering memorandum, dated September 10, 1997 (the
"Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Any references herein to the Preliminary Memorandum or
the Final Memorandum shall be deemed to include all exhibits thereto and all
documents incorporated by reference therein which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before
the Execution Time (as defined below); and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Final Memorandum shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the Execution Time which is incorporated by reference therein.
Unless stated to the contrary, all references herein to the Final Memorandum
are to
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the Final Memorandum at the Execution Time (as defined below) and are not meant
to include any amendment or supplement subsequent to the Execution Time.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each of the Initial Purchasers as set forth below in this
Section 1.
(a) Each of the Preliminary Memorandum and the Final Memorandum as of
its date did not, and the Final Memorandum (as the same may have been
amended or supplemented) as of the Closing Date (as defined below) will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Preliminary Memorandum or the
Final Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Initial Purchasers specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (and any amendment or
supplement thereof or thereto). All documents incorporated by reference in
the Preliminary Memorandum or the Final Memorandum that were filed under
the Exchange Act on or before the Execution Time complied, and all such
documents that are filed under the Exchange Act after the Execution Time
and on or before the Closing Date will comply, in all material respects
with the applicable requirements of the Exchange Act and the rules
thereunder.
(b) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M promulgated under the
Exchange Act in connection with the offering of the Securities.
(c) Neither the Company nor any or its affiliates (as defined in Rule
501(b) of Regulation D promulgated under the Securities Act ("Regulation
D")), nor any person acting on its or their behalf (excluding the Initial
Purchasers and any affiliates thereof) has, directly or indirectly, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) that is or will
be integrated with the sale of the Securities in a manner that would
require the registration of the Securities under the Securities Act or (ii)
engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offering of the
Securities.
(d) Subject to the compliance by the Initial Purchasers with the
representations, warranties and agreements set forth in Section 4, it is
not necessary in connection with the offer, sale and delivery of the
Securities in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(e) The Company is subject to the reporting requirements of Section 13
or Section 15(d) of the Exchange Act.
(f) The Securities satisfy the requirements set forth in Rule
144A(d)(3) promulgated under the Securities Act.
(g) None of the Company or its subsidiaries (as defined in Section
1-02(w) of Regulation S-X promulgated under the Securities Act),
("Subsidiaries") is required to be
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registered or regulated as an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and after giving effect to the offer and sale of the Securities and
the application of the proceeds thereof as described in the Final
Memorandum, none of the Company or its Subsidiaries be required to be
registered or regulated as an "investment company" as defined in the
Investment Company Act.
(h) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities (except as
contemplated by this Agreement).
(i) Except as set forth in the Final Memorandum, the Company and its
Subsidiaries possess and are in compliance with all approvals,
certificates, authorizations, licenses and permits issued by the
appropriate state, Federal or foreign regulatory agencies or bodies
necessary to conduct the business now being operated by them, except where
the failure to possess such approvals, certificates, authorizations,
licenses and permits or be in compliance therewith is not reasonably likely
to have a material adverse effect on the condition, financial or otherwise,
earnings, business or prospects of the Company and its Subsidiaries, taken
as a whole (a "Material Adverse Effect"), and none of the Company or its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such approval, certificate,
authorization, license or permit that individually or in the aggregate, is
likely to have a Material Adverse Effect.
(j) Except as set forth in the Final Memorandum, there is no action,
suit or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company and
its Subsidiaries threatened against the Company or any of its Subsidiaries
that is likely to result in any Material Adverse Effect or materially and
adversely affect the offering of the Securities in the manner contemplated
by the Final Memorandum.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
99.849% of the principal amount thereof, plus accrued interest, if any, from
September 15, 1997, to the Closing Date, the principal amount of the Securities
set forth opposite each Initial Purchaser's name on Schedule I attached hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 a.m., New York City time, on September 15, 1997, which
date and time may be postponed by agreement between the Initial Purchasers and
the Company or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Initial Purchasers against
payment by the Initial Purchasers of the purchase price thereof to or upon the
order of the Company by wire transfer of same day funds to an account specified
by the Company or such other manner of payment as may be agreed upon by the
Company and the Initial Purchasers. Delivery of the Securities shall be made
at such location as the Initial Purchasers shall reasonably designate at least
one business day in advance of the Closing Date and payment for the Securities
shall be made at the office of Fulbright & Xxxxxxxx L.L.P. ("Counsel for the
Initial Purchasers"), 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000.
Certificates for the Securities shall be registered in
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such names and in such denominations as the Initial Purchasers may request not
less than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Initial Purchasers in New York, New York, not
later than 1:00 p.m. on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company that (with
respect to clauses (a) and (b) below, with respect to both itself and each of
its affiliates):
(a) it has not solicited and will not solicit any offer to buy or
offer to sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D) or under
circumstances that would require the registration of the Securities under
the Securities Act;
(b) it has solicited and will solicit offers to buy the Securities
only from, and has offered and will offer, sell or deliver the Securities
only to, (i) persons who it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A promulgated under the
Securities Act ("Rule 144A")) or, if any such person is buying for one or
more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account
is a qualified institutional buyer, to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A or (ii) persons who it reasonably believes
to be institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D), and who provide to it a letter in the
form of Exhibit A to the Final Memorandum; and
(c) such Initial Purchaser is a qualified institutional buyer (as
defined in Rule 144A) and an accredited investor (as defined in Rule 501(c)
of Regulation D).
5. Agreements. The Company agrees with each of the Initial Purchasers
that:
(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in Section 5(c) hereof, as many copies of the Final Memorandum and any
supplements and amendments thereof or thereto as it may reasonably request.
The Company will pay the expenses of printing or other production of all
documents relating to the offering of the Securities.
(b) The Company will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated
by reference therein, without prior consent of the Initial Purchasers, such
consent not to be unreasonably withheld or delayed. Prior to the
completion of the sale of the Securities by the Initial Purchasers, the
Company will not file any document under the Exchange Act that is
incorporated by reference in the Final Memorandum unless the Company has
furnished you a copy for your review prior to filing and will not file any
such document to which you reasonably object.
(c) The Company will promptly advise the Initial Purchasers when,
prior to the completion of the sale of the Securities by the Initial
Purchasers, any document filed under the
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Exchange Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Securities and Exchange Commission (the
"Commission").
(d) If at any time prior to the earliest of (i) the completion of the
initial resale of the Securities by the Initial Purchasers, (ii) the
effective date of the registration statement to be filed pursuant and in
accordance with the Registration Rights Agreement dated the date hereof by
and between the Company and the Initial Purchasers and (iii) six months
after the Closing Date, any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
or supplement the Final Memorandum (including any document incorporated by
reference therein that was filed under the Exchange Act) to comply with the
Exchange Act or the rules thereunder or other applicable law, the Company
promptly will notify the Initial Purchasers of the same and, subject to
Section 5(b) hereof, will prepare and provide to the Initial Purchasers
pursuant to Section 5(a) hereof an amendment or supplement that will
correct such statement or omission or effect such compliance and, in the
case of such an amendment or supplement that is to be filed under the
Exchange Act and that is incorporated by reference in the Final Memorandum,
will file such amendment or supplement with the Commission.
(e) The Company will cooperate with the Initial Purchasers and Counsel
for the Initial Purchasers in connection with the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect so long as required for the sale of the
Securities; provided, however, that the Company shall not be required in
connection therewith to register or qualify as a foreign corporation where
it is not now so qualified or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in any
jurisdiction where it is not then so subject. The Company will promptly
advise the Initial Purchasers of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(f) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D), nor any person acting on its or their behalf will
solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D).
(g) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) promulgated under the Securities Act,
the Company will, unless it is subject to and complies with Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information ("Rule 144A Information") required to be provided by Rule
144A(d)(4) or a successor provision under the Securities Act. This
covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of
such restricted securities.
(h) The Company will not, and will not permit any of its affiliates
(as defined in Rule 501(b) of Regulation D) to, resell any Securities that
have been acquired by any of them
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other than pursuant to a registration statement filed with the Commission
or an exemption from the registration requirements of the Securities Act.
(i) Neither the Company, nor any of its affiliates (as defined in Rule
501(b) of Regulation D), nor any person acting on its or their behalf
(other than the Initial Purchasers or any affiliates thereof, as to which
the Company is not responsible) will, directly or indirectly, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) under circumstances that would
require the registration of the Securities under the Securities Act.
(j) The Company shall use its best efforts in cooperation with the
Initial Purchasers to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the date and time that this Agreement is
executed and delivered by the parties hereto (the "Execution Time") and the
Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions:
(a) The Company shall have furnished to the Initial Purchasers the
opinion of Xxxxx & Xxxxx, L.L.P., counsel for the Company, dated the
Closing Date, to the effect that:
(i) 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 corporate power and authority to own its properties
and conduct its business as described in the Final Memorandum;
(ii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum under the caption "Capitalization"; and
the Securities conform to the description thereof contained in the
Final Memorandum;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company, and (assuming the due authorization,
execution and delivery thereof by the Trustee) is a legal, valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other laws affecting creditors' rights
generally from time to time in effect and general principles of equity
(regardless of whether considered in a proceeding in equity or at
law)); and the issuance and the sale of the Securities have been duly
authorized by the Company and, the Securities, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement and in accordance with the terms of the
Indenture, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or other laws affecting
creditors' rights generally from time to time in effect and general
principles (regardless of whether considered in a proceeding in equity
or at law));
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(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation of the transactions contemplated herein,
except such as may be required under the blue sky or securities laws
of any jurisdiction in connection with the purchase and distribution
of the Securities by the Initial Purchasers (as to which such counsel
need express no opinion) and such other approvals (specified in such
opinion) as have been obtained;
(vi) neither the issue and sale of the Securities by the
Company, the execution and delivery by the Company of the Indenture,
the consummation of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or constitute a default
under (A) any law, (B) the certificate of incorporation or by-laws of
the Company or (C) the terms of any indenture or other agreement or
instrument providing for the borrowing of money known to such counsel
and to which the Company or any of its subsidiaries is a party or
bound except in the case of clauses (A) and (C) above, such conflict,
breach, violation or default that is not, individually or in the
aggregate reasonably likely to have a Material Adverse Effect;
(vii) assuming (A) the accuracy of the representations and
warranties and compliance with the agreements of the Company and the
Initial Purchasers contained herein, (B) the compliance by the Initial
Purchasers with the offering and transfer procedures and restrictions
described in the Final Memorandum, (C) the accuracy of the
representations and warranties made in accordance with this Agreement
and the Final Memorandum by the purchasers to whom you initially
resell Securities and (D) that purchasers to whom you initially resell
Securities receive a copy of the Final Memorandum prior to such sale,
it is not necessary in connection with the offer, sale and delivery of
the Securities in the manner contemplated by this Agreement to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939; and
(viii) the Company is not required to be registered or regulated
as an "investment company" within the meaning of the Investment
Company Act.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company, your
representatives and your counsel at which the contents of the Final
Memorandum were discussed and, although such counsel did not independently
verify such information and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum, on the basis of the foregoing (relying
as to factual matters upon statements of officers and other representatives
of the Company and as to materiality to a large degree on officers and
other representatives of the Company and your representatives) no facts
came to such counsel's attention that led such counsel to believe that at
the Execution Time the Final Memorandum (other than the financial
statements, the notes thereto and the auditor's report thereon and the
other financial, numerical, statistical and accounting data included or
incorporated by reference therein, or omitted therefrom, as to which such
counsel need express no belief)
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contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that the Final Memorandum (other than the financial statements, the notes
thereto and the auditor's report thereon and the other financial,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, as to which such counsel need
express no belief) includes an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware, the State of New York, the State of Texas or the United
States, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing provided such opinions are
also addressed to the Initial Purchasers and are in form and substance
satisfactory to them and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
All references in this Section 6(a) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have furnished to the Initial Purchasers the
opinion of Xxxxx X. XxXxxxxxx, general counsel of the Company, dated the
Closing Date, to the effect that:
(i) each of Global Marine Drilling Company, Applied Drilling
Technology Inc. and Global Marine Integrated Services - International
Inc. (individually a "Subsidiary" and collectively the "Subsidiaries")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with corporate power and authority to own its
properties and conduct its business as described in the Final
Memorandum, and the Company and each of the Subsidiaries is duly
qualified to do business as a foreign corporation 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 as would not have a Material
Adverse Effect;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Final Memorandum, all outstanding shares of capital stock of the
Subsidiaries 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, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; and the Securities conform to the
description thereof contained in the Final Memorandum;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as may be required under
the blue sky or securities laws of any jurisdiction in connection with
the purchase and distribution of the
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Securities by the Initial Purchasers, as to which such counsel need
express no opinion, and such other approvals (specified in such
opinion) as have been obtained;
(v) neither the issue and sale of the Securities by the Company,
the execution and delivery by the Company of the Indenture, the
consummation of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof, will conflict
with, result in a breach or violation of, or constitute a default
under (A) any law, (B) the certificate of incorporation or by-laws of
the Company, (C) 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 (D) any judgment, order or
decree known to such counsel to be applicable to the Company or its
Subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or its Subsidiaries except in the case of clauses (A), (C) and (D)
above, such conflict, breach, violation or default that is not,
individually or in the aggregate reasonably likely to have a Material
Adverse Effect;
(vi) except as set forth in the Final Memorandum, the Company
and its Subsidiaries possess and are in compliance with all approvals,
certificates, authorizations, licenses and permits issued by the
appropriate state, Federal or foreign regulatory agencies or bodies
necessary to conduct their business as described in the Final
Memorandum, except where the failure to possess such approvals,
certificates, authorizations, licenses and permits or be in compliance
therewith would not be reasonably likely to have a Material Adverse
Effect and to the knowledge of such counsel, none of the Company or
its Subsidiaries, has received any notice of proceedings relating to
the revocation or modification of any such approval, certificate,
authorization, license or permit which, individually or in the
aggregate, if it became the subject of an unfavorable decision, ruling
or finding, would be reasonably likely to have a Material Adverse
Effect; and
(vii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or government
agency, authority or body or any arbitrator to which the Company or
its Subsidiaries is a party which is of a character that would be
required to be disclosed in the Final Memorandum if it were filed as a
registration statement on Form S-1 with the Commission under the
Securities Act, which is not disclosed in the Final Memorandum.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company, your
representatives and your counsel at which the contents of the Final
Memorandum were discussed and, although such counsel did not independently
verify such information and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum, on the basis of the foregoing (relying
as to factual matters upon statements of officers and other representatives
of the Company and as to materiality to a large degree on officers and
other representatives of the Company and your representatives) no facts
came to such counsel's attention that led such counsel to believe that at
the Execution Time the Final Memorandum (other than the financial
statements, the notes thereto and the auditor's report thereon and the
other financial, numerical, statistical and accounting data included or
incorporated by reference therein, or omitted therefrom, as to which such
counsel need express no belief)
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contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that the Final Memorandum (other than the financial statements, the notes
thereto and the auditor's report thereon and the other financial,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, as to which such counsel need
express no belief) includes an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware, the State of Texas or the United States, to the extent he
deems proper and specified in such opinion, upon the opinion of other
counsel of good standing provided such opinions are also addressed to the
Initial Purchasers and are in form and substance satisfactorily to them and
(B) as to matters of fact, to the extent he deems proper, on certificates
of responsible officers of the Company and public officials.
All references in this Section 6(b) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Initial Purchasers shall have received from Counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Indenture, the
Final Memorandum (together with any amendment or supplement thereof or
thereto) and other related matters as the Initial Purchasers may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(d) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by the Chairman of the Board or the
President or any Vice President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Final Memorandum,
any amendment or supplement to the Final Memorandum and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereof or thereto), there has been no material adverse
change in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(e) At the Execution Time and at the Closing Date, Coopers & Xxxxxxx
L.L.P. shall have furnished to the Initial Purchasers a letter or letters,
dated, respectively, as of the Execu-
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tion Time and as of the Closing Date, in form and substance satisfactory to
the Initial Purchasers, confirming that they are independent certified
public accountants with respect to the Company under Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants (the "AICPA"), and its interpretations and rulings, and stating
in effect that:
(i) in their opinion the audited financial statements incorporated
by reference in the Final Memorandum and reported on by them comply in
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder;
(ii) on the basis of performing procedures specified by the
AICPA for a review of interim financial information as described in
SAS No. 71, Interim Financial Information, on the unaudited condensed
consolidated financial statements; a reading of the minutes of the
meetings of the directors and audit committee of the Company; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to December 31,
1996, nothing came to their attention that caused them to believe
that:
(1) any material modification should be made to the unaudited
condensed consolidated financial statements incorporated by
reference in the Final Memorandum for them to be in conformity
with generally accepted accounting principles;
(2) the unaudited condensed consolidated financial statements
incorporated by reference in the Final Memorandum do not comply as
to form in all material respects with the applicable accounting
requirements of the Exchange Act and related published rules and
regulations of the Commission;
(3) there were, at July 31, 1997, any changes in the capital
stock, increases in the long-term debt, or decreases in net
current assets or shareholders' equity of the Company as compared
with the amounts shown in the June 30, 1997 unaudited condensed
consolidated balance sheet incorporated by reference in the Final
Memorandum, or for the period from July 1, 1997 to July 31, 1997,
there were any decreases, as compared to the corresponding period
in the preceding year, in consolidated revenues or in total or
per-share amounts of net income except in all instances for
changes, increases, or decreases that the Final Memorandum
discloses have occurred or may occur; or
(4) with respect to the period subsequent to July 31, 1997,
there was, at a specified date not more than five business days
prior to the date of the letter, any change in the capital stock,
increase in long-term debt or any decrease in consolidated net
current assets or shareholders' equity of the Company as compared
with amounts shown on the June 30, 1997 unaudited condensed
consolidated balance sheet incorporated by reference in the Final
Memorandum; or for the period from August 1, 1997 to such
specified date, there were any decreases, as compared with the
corresponding period in the
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preceding year, in consolidated revenues or in the total or per-
share amounts of net income, except or changes, increases, or
decreases that the Final Memorandum or documents incorporated by
reference therein discloses have occurred or may occur; and
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Final Memorandum, including the information set forth
under the captions "Summary Financial and Operating Data" and "Summary
Quarterly Financial and Operating Data" in the Final Memorandum, the
information included or incorporated in Items 1, 2, 6, 7, and 11 of
the Company's Annual Report on Form 10-K, incorporated in the Final
Memorandum, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly
Reports on Form 10-Q, incorporated in the Final Memorandum, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Final Memorandum in this Section 6(e) include any
amendment or supplement thereof or thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any increase or decrease specified in the letter or letters
referred to in Section 6(e) hereof or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.
(g) As of the Closing Date the Securities shall be rated not lower
than BBB- by Standard & Poor's Corporation and Baa2 by Xxxxx'x Investors
Service, Inc. Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) promulgated under the Securities Act) or any notice
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of
the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and Counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Initial
Purchasers. Notice of such cancellation shall be given to the Company in
writing or by telephone, facsimile or telegraph confirmed in writing.
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13
The documents required to be delivered by this Section 6 shall be delivered
at the office of Fulbright & Xxxxxxxx L.L.P., 0000 XxXxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000-0000, on the Closing Date.
7. Reimbursement of Initial Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Initial Purchasers in the payment for the Securities on the
Closing Date, the Company will reimburse the Initial Purchasers severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the
meaning of either the Securities Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum or any Rule 144A Information
provided by the Company to any holder or prospective purchaser of
Securities pursuant to Section 5(g), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial
Purchasers specifically for inclusion therein; provided further, that with
respect to any untrue statement or omission of material fact made in the
Preliminary Memorandum, the indemnity agreement contained in this Section
8(a) shall not inure to the benefit of any Initial Purchaser from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities concerned, to the extent that any such loss, claim, damage or
liability of such Initial Purchaser occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final
and nonappealable judgment that (w) the Company had previously furnished
copies of the Final Memorandum to the Initial Purchasers, (x) delivery of
the Final Memorandum was required to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Preliminary
Memorandum was corrected in the Final Memorandum and (z) there was not sent
or given to such person, at or prior to the written confirmation of the
sale of such Securities to such person, a copy of the Final Memorandum.
This indemnity agreement will be in addition to any liability that the
Company may otherwise have.
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14
(b) Each Initial Purchaser agrees to severally indemnify and hold
harmless the Company, its directors, its officers and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by
or on behalf of such Initial Purchaser specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereof or thereto). This indemnity agreement will be in
addition to any liability that any Initial Purchaser may otherwise have.
The Company acknowledges that the statements set forth in the last
paragraph of the cover page and under the heading "Plan of Distribution" in
the Preliminary Memorandum and the Final Memorandum constitute the only
information furnished in writing by or on behalf of the Initial Purchasers
for inclusion in the Preliminary Memorandum or the Final Memorandum (or in
any amendment or supplement thereof or thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under Section 8(a) or 8(b) hereof
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in Section 8(a) or 8(b) hereof.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party, it being understood that
the indemnifying party shall not be liable for more than one separate firm
(in addition to one local counsel in each jurisdiction) for all indemnified
parties in each jurisdiction in which any claim or action arising out of
the same general allegations or circumstances is brought. An indemnifying
party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party
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from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party will not, without its prior consent, be liable for
any settlement or compromise or consent to the entry of any judgment.
(d) In the event that the indemnity provided in Section 8(a) or 8(b)
hereof is unavailable to or insufficient for any reason to hold harmless an
indemnified party (other than as set forth therein), the Company and the
Initial Purchasers agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company and the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received
by the Company and by the Initial Purchasers from the offering of the
Securities; provided, however, that in no case shall any Initial Purchaser
(except as may be provided in any agreement among the Initial Purchasers
relating to the offering of the Securities) be responsible for any amount
in excess of the purchase discount or commission applicable to the
Securities purchased by such Initial Purchaser hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Initial Purchasers shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and of the Initial
Purchasers in connection with the statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total
net proceeds from the offering of the Securities (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed
to be equal to the total purchase discounts and commissions, in each case
as set forth on the cover page of the Final Memorandum. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or the Initial
Purchasers. The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8(d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 8, each
person who controls any Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as
such Initial Purchaser, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act and each officer
and director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of
this Section 8(d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Initial Purchaser hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Initial Purchasers shall be obligated severally
to take up and pay for (in the respective proportions that the principal amount
of Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all
the remaining Initial Purchasers) the Securities that the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
that the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any,
of the Securities,
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and if such non-defaulting Initial Purchasers do not purchase all the
Securities, this Agreement will terminate without liability to any
non-defaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Initial Purchasers
shall determine in order that the required changes in the Final Memorandum or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Initial Purchaser of its liability,
if any, to the Company or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended, limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum.
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchasers set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchasers or the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered, telegraphed or sent by facsimile and confirmed to them, care
of Salomon Brothers Inc, at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000; or, if sent to the Company, will be mailed, delivered, telegraphed or
sent by facsimile and confirmed to it at 000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxx 00000-0000, attention of General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(g) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and the Initial Purchasers.
Very truly yours,
GLOBAL MARINE INC.
By: /s/ X.X. XXXXXXXXX
--------------------------------------------
Name: X.X. XxXxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
BT ALEX. XXXXX INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
By: SALOMON BROTHERS INC
By: /s/ XXXXX X.X. XXXXXX
-----------------------------------------
Name: Xxxxx X.X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
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SCHEDULE I
Principal Amount
of Securities
Initial Purchasers to be Purchased
---------------------------------------------------------------------- ---------------
Salomon Brothers Inc $ 60,000,000
BT Alex. Xxxxx Incorporated 60,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation 60,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 60,000,000
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated 60,000,000
------------
TOTAL $300,000,000
============
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