s3.htm
As
filed with the Securities and Exchange Commission on August 6, 2009
Registration
No.
333-
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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Form
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
GSE
SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of incorporation or organization)
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52-1868008
(I.R.S.
Employer Identification Number)
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1332
Londontown Boulevard, Suite 200
Sykesville,
MD 21784
(410)
970-7800
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Lawrence
Gordon, Esq.
Vice
President and General Counsel
GSE
Systems, Inc.
1332
Londontown Boulevard, Suite 200
Sykesville,
MD 21784
Tel:
(410) 970-7800
Fax:
(410) 970-7997
(Name,
address, including zip code, and telephone number, including area code of agent
for service)
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With
copies to:
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Michael
D. Schwamm, Esq.
Duane
Morris LLP
1540
Broadway
New
York, NY 10036-4086
Tel:
(212) 692-1054
Fax:
(212) 692-1020
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Approximate date of commencement of
proposed sale to the public: From time to time after the effective
date of this registration statement.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
o
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall be effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act, check the following
box. o
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated
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Accelerated
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting
company
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CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
to be Registered(1)
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering
Price Per Unit(2)
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Proposed
Maximum
Aggregate
Offering
Price(1)(2)
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Amount
of
Registration
Fee(4)
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Debt
securities(3)
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--
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--
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--
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--
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Preferred
stock, par value $0.01 per share
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--
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--
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--
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--
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Common
stock, par value $0.01 per share
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--
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--
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--
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--
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Warrants
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--
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--
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--
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--
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Total
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--
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--
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$25,000,000
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$1,395.00
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(1)
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There
are being registered pursuant to this registration statement such
indeterminate number of shares of common stock and preferred stock, such
indeterminate principal amount of debt securities and such indeterminate
amount of warrants as may be offered from time to time pursuant to the
prospectus contained in the registration statement with an aggregate
initial offering price not to exceed $25,000,000. The securities
registered hereunder may be sold by the issuer separately or together with
other securities registered hereunder. There are also being registered
hereunder an indeterminate amount or number of shares of the securities as
may be issuable upon conversion or exchange of debt securities, preferred
stock or warrants or pursuant to antidilution provisions thereof. Separate
consideration may or may not be received for securities that are issuable
upon conversion of, or in exchange for, or upon exercise of, convertible
or exchangeable securities.
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(2)
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Pursuant
to Rule 457(o) and Form S-3 General Instruction II.D., which permit the
registration fee to be calculated on the basis of the maximum offering
price of all securities listed, the table does not specify information as
to the amount of any particular security to be registered.
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(3)
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The
debt securities may be senior, senior subordinated or subordinated and may
be secured or unsecured.
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(4)
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Calculated
pursuant to Rule 457(o) under the Securities Act of
1933.
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The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission acting
pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
Subject
to Completion, dated August 6, 2009
PROSPECTUS
GSE
SYSTEMS, INC.
$25,000,000
Debt
Securities
Preferred
Stock
Common
Stock
Warrants
We may
offer from time to time to sell debt securities, common stock, preferred stock
or warrants pursuant to this prospectus. The debt securities may be senior,
senior subordinated or subordinated and may be secured or unsecured. The
securities covered by this prospectus may be offered and sold by us in one or
more offerings. The debt securities, preferred stock and warrants may be
convertible into or exercisable or exchangeable for common stock or preferred
stock or other of our securities.
Shares of
our common stock are traded on the NYSE Amex Stock Exchange under the symbol
“GVP.”
We may
offer and sell these securities to or through one or more underwriters, dealers
and agents, or directly to purchasers, on a continuous or delayed
basis.
This
prospectus describes some of the general terms that may apply to these
securities. The specific terms of any securities to be offered will be described
in a supplement to this prospectus.
You
should refer to the risk factors that may be included in a prospectus supplement
and in our periodic reports and other information we file with the Securities
and Exchange Commission and carefully consider that information before investing
in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The date
of this prospectus
is ,
2009.
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About
This Prospectus
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3
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About
GSE Systems
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3
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Where
You Can Find More Information
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3
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Incorporation
By Reference
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3
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Forward-Looking
Statements
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4
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Risk
Factors
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5
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Description
of Debt Securities
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5
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Description
of Capital Stock
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12
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Description
of Warrants
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14
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Ratio
of Earnings to Fixed Charges
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Use
of Proceeds
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Plan
of Distribution |
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Certain
Legal Matters
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Experts
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The
registration statement containing this prospectus, including the exhibits to the
registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement,
including the exhibits and the documents incorporated herein by reference, can
be read on the SEC website or at the SEC offices mentioned under the heading
“Where You Can Find More Information.”
ABOUT
THIS PROSPECTUS
We may
from time to time sell the securities in one or more offerings. This prospectus
provides you with a general description of the securities. Each time we offer
the securities, we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement
may also supplement, modify, or supersede other information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with the information incorporated by reference as described below under
the heading “Incorporation by Reference.”
You
should rely only on the information provided in this prospectus and in any
prospectus supplement, including the information incorporated by reference. We
have not authorized anyone to provide you with different information. We are not
offering the securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
ABOUT
GSE SYSTEMS
GSE
Systems, Inc. (the “Company”, “GSE” or “GSE Systems” or “we” or “us”) is
incorporated under the laws of the State of Delaware and is a leader in
real-time, high fidelity simulation. The Company provides simulation solutions
and services to the nuclear and fossil electric utility industry and the
chemical and petrochemical industries. In addition, the Company provides plant
monitoring and signal analysis monitoring and optimization software primarily to
the power industry.
Our
executive offices are located at 1332 Londontown Boulevard, Suite 200,
Sykesville, MD 21784 and our telephone number at that location is (410)
970-7800.
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. Our SEC filings are available to the public from the SEC’s website
at www.sec.gov. You may
also read and copy any document we file at the SEC’s public reference room in
Washington, D.C., located at 100 F Street, N.E., Room 1580, Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Information about us is also available at our website at
www.gses.com. However,
the information on our website is not part of this prospectus.
INCORPORATION
BY REFERENCE
The SEC
allows us to “incorporate by reference” in this prospectus the information in
the documents that we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus. Any
information that is part of this prospectus or any prospectus supplement that
speaks as of a later date than any other information that is part of this
prospectus or any prospectus supplement updates or supersedes such other
information. We incorporate by reference in this prospectus the documents listed
below and any documents or portions thereof that we file with the SEC after the
date of this prospectus under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we sell, or otherwise terminate the
offering of, all of the securities that may be offered by this prospectus. We do
not, however, incorporate by reference in this prospectus any documents or
portions thereof, or any other information, that we furnish or are deemed to
furnish, and not file, with the SEC in accordance with the SEC
rules.
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Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as
amended by Amendment No. 1 thereto filed on June 30,
2009;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2009;
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Our
Current Reports on Form 8-K filed on March 16, 2009 and May 11, 2009;
and
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The
description of our common stock contained in the Registration Statement on
Form 8-A filed on July 24, 1995, under Section 12(g) of the Securities
Exchange Act of 1934, as amended.
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You may
obtain, free of charge, a copy of any of these documents (other than exhibits to
these documents unless the exhibits specifically are incorporated by reference
into these documents or referred to in this prospectus) by writing or calling us
at the following address and telephone number:
GSE
Systems, Inc.
1332
Londontown Boulevard, Suite 200
Sykesville,
MD 21784
Attn:
Corporate Secretary
Tel:
(410) 970-7800
FORWARD-LOOKING
STATEMENTS
This
prospectus and the documents incorporated by reference herein contain
“forward-looking” statements within the meaning of Section 27A of the Securities
Act of 1933 (the "Securities Act") and Section 21E of the Securities Exchange
Act of 1934 that are based on management’s assumptions, expectations and
projections about us, and the industry within which we operate, that have been
made pursuant to the Private Securities Litigation Reform Act of 1995 and which
reflect our expectations regarding our future growth, results of operations,
performance and business prospects and opportunities. Wherever possible, words
such as “anticipate,” “believe,” “continue,” “estimate”, “intend”, “may,”
“plan”, “potential”, “predict”, “expect”, “should”, “will” and similar
expressions, or the negative of these terms or other comparable terminology,
have been used to identify these forward-looking statements. These
forward-looking statements may also use different phrases. These statements
regarding our expectations reflect our current beliefs and are based on
information currently available to us. Accordingly, these statements by their
nature are subject to risks and uncertainties, including those listed under
“Risk Factors,” which could cause our actual growth, results, performance and
business prospects and opportunities to differ from those expressed in, or
implied by, these statements. Discussions containing these forward-looking
statements may be found, among other places, in “Business” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
incorporated by reference from our most recent annual report on Form 10-K and in
our most recent quarterly report on Form 10-Q subsequent to the filing of our
most recent annual report on Form 10-K with the SEC, as well as any amendments
thereto reflected in subsequent filings with the SEC. We may not actually
achieve the plans, intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements we make.
Except as otherwise required by federal securities law, we are not obligated to
update or revise these forward-looking statements to reflect new events or
circumstances. We caution you that a variety of factors, including but not
limited to the factors described under the heading “Risk Factors” and the
following, could cause our business conditions and results to differ materially
from what is contained in forward-looking statements:
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changes
in the rate of economic growth in the United States and other major
international economies;
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changes
in investment by the nuclear and fossil electric utility industry, the
chemical and petrochemical industries and the U.S.
military;
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changes
in the financial condition of our
customers;
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changes
in regulatory environment;
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changes
in project design or schedules;
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contract
cancellations;
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changes
in our estimates of costs to complete
projects;
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changes
in trade, monetary and fiscal policies
worldwide;
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war
and/or terrorist attacks on facilities either owned or where equipment or
services are or may be provided;
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outcomes
of future litigation;
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protection
and validity of our patents and other intellectual property
rights;
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increasing
competition by foreign and domestic
companies;
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compliance
with our debt covenants;
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recoverability
of claims against our customers and others;
and
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changes
in estimates used in our critical accounting
policies.
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Other
factors and assumptions not identified above were also involved in the formation
of these forward looking statements and the failure of such other assumptions to
be realized, as well as other factors, may also cause actual results to differ
materially from those projected. Most of these factors are difficult to predict
accurately and are generally beyond our control. You should consider the areas
of risk described above in connection with any forward looking statements that
may be made by us. You should not place undue reliance on any forward-looking
statements. New factors emerge from time to time, and it is not possible for us
to predict which factors will arise.
We
undertake no obligation to publicly update any forward looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any additional disclosures we make in proxy
statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and
current reports on Form 8-K filed with the SEC.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before making an
investment decision, you should carefully read and consider the risk factors
incorporated by reference in this prospectus, as well as those contained in the
applicable prospectus supplement, as the same may be updated from time to time
by our future filings with the SEC under the Securities Exchange Act of 1934.
You should also refer to other information contained in or incorporated by
reference in this prospectus and any applicable prospectus supplement, including
our financial statements and the related notes incorporated by reference herein.
Additional risks and uncertainties not presently known to us at this time or
that we currently deem immaterial may also materially and adversely affect our
business and operations.
DESCRIPTION
OF DEBT SECURITIES
General
The debt
securities that we may offer by this prospectus consist of notes, debentures, or
other evidences of our indebtedness, which we refer to collectively as “debt
securities.” We will set forth the particular terms of the debt securities we
offer in a prospectus supplement. The extent, if any, to which the following
general provisions apply to particular debt securities will be described in the
applicable prospectus supplement. The following description of general terms
relating to the debt securities and the indenture under which the debt
securities will be issued are summaries only and therefore are not complete. You
should read the indenture and the prospectus supplement regarding any particular
issuance of debt securities.
The debt
securities will be issued under an indenture between us and a trustee that will
be named in the applicable prospectus supplement, and may be supplemented or
amended from time to time following its execution. The indenture, and any
supplemental indentures thereto, will be subject to, and governed by, the Trust
Indenture Act of 1939, as amended.
The
applicable prospectus supplement will describe the following terms of any series
of debt securities that we may offer (to the extent applicable to the debt
securities):
• the
title of the debt securities;
• the
extent, if any, to which the debt securities are subordinated in right of
payment to our other indebtedness;
• any
provisions relating to any security provided for the debt
securities;
• any
limit on the aggregate principal amount of the debt securities;
• any
guarantees applicable to the debt securities, and any subordination provisions
or other limitations applicable to any such guarantees;
• the
persons to whom any interest on the debt securities will be payable, if other
than the registered holders thereof on the regular record date
therefor;
• the
date or dates on which the principal of the debt securities will be
payable;
• the
rate or rates at which the debt securities will bear interest, if any, and the
date or dates from which interest will accrue;
• the
dates on which interest will be payable and the regular record dates for
interest payment dates;
• the
place or places where the principal of and any premium, make-whole amount and
interest on the debt securities will be payable;
• the
period or periods, if any, within which, and the price or prices at which, the
debt securities may be redeemed, in whole or in part, at our
option;
• our
obligation, if any, to redeem or purchase the debt securities pursuant to
sinking fund or similar provisions or at the option of a holder and the terms
and conditions of any such redemption or purchase;
• the
denominations in which the debt securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof;
• the
currency, currencies or currency units, if other than currency of the United
States of America, in which payment of the principal of and any premium,
make-whole amount or interest on the debt securities will be payable, and the
terms and conditions of any elections that may be made available with respect
thereto;
• any
index or formula used to determine the amount of payments of principal of and
any premium, make-whole amount or interest on the debt securities;
• whether
the debt securities are to be issued in whole or in part in the form of one or
more global securities and, if so, the identity of the depositary, if any, for
the global securities;
• the
terms and conditions, if any, pursuant to which the debt securities are
convertible into or exchangeable for our common stock or other securities of us
or any other person;
• any
events of default with respect to the debt securities, in addition to or in lieu
of those set forth in the indenture, and the remedies therefor;
• the
principal amount (or any portion of the principal amount) of the debt securities
which will be payable upon any declaration of acceleration of the maturity of
the debt securities pursuant to an event of default; and
• the
applicability to the debt securities of the provisions described in “—
Defeasance” below.
We may
issue debt securities at a discount from their stated principal amount. Federal
income tax considerations and other special considerations applicable to any
debt security issued with original issue discount (which we refer to as an
original issue discount security) may be described in an applicable prospectus
supplement.
If the
purchase price of any series of the debt securities is payable in a foreign
currency or currency unit or if the principal of or any premium or interest on
any series of the debt securities is payable in a foreign currency or currency
unit, the restrictions, elections, general tax considerations, specific terms,
and other information with respect to the debt securities and the applicable
foreign currency or currency unit will be set forth in an applicable prospectus
supplement.
Unless
otherwise indicated in an applicable prospectus supplement:
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the
debt securities will be issued only in fully registered form (without
coupons) in denominations of $1,000 or integral multiples thereof;
and
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payment
of principal, premium, if any, and interest on the debt securities will be
payable, and the exchange, conversion, and transfer of debt securities
will be registrable, at our office or agency maintained for those purposes
and at any other office or agency maintained for those purposes. No
service charge will be made for any registration of transfer or exchange
of the debt securities, but we may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection
therewith.
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Global
Securities
The debt
securities of a series may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depositary or its nominee identified in an applicable prospectus supplement.
Unless and until it is exchanged in whole or in part for debt securities in
registered form, a global security may not be registered for transfer or
exchange except:
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by
the depositary to a nominee of the
depositary;
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by
a nominee of the depositary to the depositary or another nominee of the
depositary;
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by
the depositary or any nominee of the depositary to a successor depositary
or a nominee of the successor depositary;
or
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in
any other circumstances described in an applicable prospectus
supplement.
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The
specific terms of the depositary arrangement with respect to any debt securities
to be represented by a global security will be described in an applicable
prospectus supplement. We expect that the following provisions will apply to
depositary arrangements.
Unless
otherwise specified in an applicable prospectus supplement, any global security
that represents debt securities will be registered in the name of the depositary
or its nominee. Upon the deposit of a global security with or on behalf of the
depositary for the global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global security to the accounts of
institutions that are participants in such system. The accounts to be credited
will be designated by the underwriters or agents of the debt securities or by
us, if the debt securities are offered and sold directly by us.
Ownership
of beneficial interests in debt securities represented by a global security will
be limited to participants in the book-entry registration and transfer system of
the applicable depositary or persons that may hold interests through those
participants. Ownership of those beneficial interests by participants will be
shown on, and the transfer of ownership will be effected only through, records
maintained by the depositary or its nominee for such global security. Ownership
of such beneficial interests by persons that hold through such participants will
be shown on, and the transfer of such ownership will be effected only through,
records maintained by the participants. The laws of some jurisdictions require
that specified purchasers of securities take physical delivery of their
securities in definitive form. These laws may impair your ability to transfer
beneficial interests in a global security.
So long
as the depositary for a global security, or its nominee, is the registered owner
of the global security, the depositary or the nominee, as the case may be, will
be considered the sole owner or holder of the debt securities represented by the
global security for all purposes under the indenture. Unless otherwise specified
in an applicable prospectus supplement, owners of beneficial interests in the
global security will not be entitled to have any of the debt securities
represented by the global security registered in their names, will not receive
or be entitled to receive physical delivery of any such debt securities in
certificated form, and will not be considered the owners or holders of the debt
securities for any purpose under the indenture. Accordingly, each person owning
a beneficial interest in debt securities represented by a global security must
rely on the procedures of the applicable depositary and, if the person is not a
participant in the book-entry registration and transfer system of the applicable
depositary, on the procedures of the participant through which the person owns
its interest, to exercise any rights of an owner or holder of debt securities
under the indenture.
We
understand that, under existing industry practices, if an owner of a beneficial
interest in debt securities represented by a global security desires to give any
notice or take any action that an owner or holder of debt securities is entitled
to give or take under the indenture:
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the
applicable depositary would authorize its participants to give the notice
or take the action; and
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the
participants would authorize persons owning the beneficial interests
through the participants to give the notice or take the action or would
otherwise act upon the instructions of the persons owning the beneficial
interests.
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Principal
of and any premium and interest on debt securities represented by a global
security will be payable in the manner described in an applicable prospectus
supplement. Payment of principal of, and any premium or interest on, debt
securities represented by a global security will be made to the applicable
depositary or its nominee, as the case may be, as the registered owner or the
holder of the global security. None of us, the trustee, any paying agent, or the
registrar for debt securities represented by a global security will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in those debt
securities or for maintaining, supervising, or reviewing any records relating to
those beneficial ownership interests.
Certain
Covenants
Maintenance of Office or
Agency. We will be required to maintain an office or agency in
each place of payment for each series of debt securities for notice and demand
purposes and for the purposes of presenting or surrendering debt securities for
payment, registration of transfer, or exchange.
Paying Agents,
Etc. If we act as our own paying agent with respect to any
series of debt securities, on or before each due date of the principal of or
interest on any of the debt securities of that series, we will be required to
segregate and hold in trust for the benefit of the persons entitled to payment a
sum sufficient to pay the amount due and to notify the trustee promptly of our
action or failure to act. If we have one or more paying agents for any series of
debt securities, prior to each due date of the principal of or interest on any
debt securities of that series, we will be required to deposit with a paying
agent a sum sufficient to pay the amount due and, unless the paying agent is the
trustee, to promptly notify the trustee of our action or failure to act. All
moneys paid by us to a paying agent for the payment of principal of or interest
on any debt securities that remain unclaimed for two years after the principal
or interest has become due and payable may be repaid to us, and thereafter the
holder of those debt securities may look only to us for payment
thereof.
Existence. We will
be required to, and will be required to cause our subsidiaries to, preserve and
keep in full force and effect our and their existence, charter rights, statutory
rights, and franchises, except to the extent that our board of directors
determines that the preservation thereof no longer is desirable in the conduct
of our business.
Restrictive
Covenants. Any restrictive covenants applicable to any series
of debt securities will be described in an applicable prospectus
supplement.
Events
of Default
Unless
otherwise specified in the applicable prospectus supplement, the following will
be events of default with respect to debt securities of any series:
(1) default
in the payment of any interest on any debt security of that series when due,
which default continues for 30 days;
(2) default
in the payment when due of the principal of or premium or make-whole amount, if any, on any debt
security of that series when due;
(3) default
in the deposit of any sinking fund payment when due;
(4) default
in the performance, or breach, of our covenants or agreements in the indenture
with respect to the debt securities of such series, subject to any applicable
notice and cure provisions; and
(5) specified
events of bankruptcy, insolvency, or
reorganization involving us or certain of our subsidiaries.
Additional
or different events of default applicable to a series of debt securities may be
described in a prospectus supplement. An event of default of one series of debt
securities is not necessarily an event of default for any other series of debt
securities.
Pursuant
to the Trust Indenture Act, the trustee is required, within 90 calendar days
after the occurrence of a default in respect of any series of debt securities,
to give to the holders of the debt securities of that series notice of all
uncured defaults known to it, except that:
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in
the case of a default in the performance of any covenant of the character
contemplated in clause (4) above, no notice will be given until at least
30 calendar days after the occurrence of the default;
and
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·
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other
than in the case of a default of the character contemplated in clause (1),
(2), or (3) above, the trustee may withhold notice if and so long as it in
good faith determines that the withholding of notice is in the interests
of the holders of the debt securities of that
series.
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If an
event of default described in clause (5) above occurs, the principal of,
premium, if any, and accrued interest on the debt securities of that series will
become immediately due and payable without any declaration or other act on the
part of the trustee or any holder of the debt securities of that series. If any
other Event of Default with respect to debt securities of any series occurs and
is continuing, either the trustee or the holders of at least 25% in principal
amount of the debt securities of that series may declare the principal amount of
all debt securities of that series to be due and payable immediately. However,
at any time after a declaration of acceleration with respect to debt securities
of any series has been made, but before a judgment or decree based on such
acceleration has been obtained, the holders of a majority in principal amount of
the debt securities of that series may, under specified circumstances, rescind
and annul such acceleration. See “— Modification and Waiver” below.
Subject
to the duty of the trustee to act with the required standard of care during an
event of default, the trustee will have no obligation to exercise any of its
rights or powers under the indenture at the request or direction of the holders
of debt securities, unless holders of debt securities shall have furnished to
the trustee reasonable security or indemnity. Subject to the provisions of the
indenture, including those requiring security or indemnification of the trustee,
the holders of a majority in principal amount of the debt securities of any
series will have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee, with respect to the debt securities of that
series.
No holder
of a debt security of any series will have any right to institute any proceeding
with respect to the indenture or for any remedy thereunder unless:
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the
holder has previously given to the trustee written notice of a continuing
event of default;
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·
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the
holders of at least 25% in aggregate principal amount of the outstanding
debt securities of the same series have requested the trustee to institute
a proceeding in respect of the event of
default;
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·
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the
holder or holders have furnished reasonable indemnity to the trustee to
institute the proceeding as
trustee;
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the
trustee has not received from the holders of a majority in principal
amount of the outstanding debt securities of the same series a direction
inconsistent with the request; and
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·
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the
trustee has failed to institute the proceeding within 60 calendar
days.
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However,
the limitations described above do not apply to a suit instituted by a holder of
a debt security for enforcement of payment of the principal of and interest on
such debt security on or after the applicable due dates for the payment of such
principal and interest.
We will
furnish to the trustee annually a statement as to our performance of our
obligations under the indenture and as to any default in our
performance.
Modification
and Waiver
In
general, unless we otherwise indicate in a prospectus supplement, we and the
applicable trustee may make modifications and amendments of the
indenture with the consent of the holders of not less than a majority in
principal amount of the debt securities of each series affected thereby.
However, no modification or amendment of the indenture may, without the consent
of the holder of each debt security affected thereby:
·
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change
the stated maturity of, or any installment of principal of, or interest
on, any debt security;
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·
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reduce
the principal amount of, the rate of interest on, or the premium, if any,
payable upon the redemption of, any debt
security;
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·
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reduce
the amount of principal of an original issue discount security payable
upon acceleration of the maturity
thereof;
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·
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change
the place or currency of payment of principal of, or premium, if any, or
interest on any debt security;
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·
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impair
the right to institute suit for the enforcement of any payment on or with
respect to any debt security on or after the stated maturity or prepayment
date thereof; or
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·
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reduce
the percentage in principal amount of debt securities of any series
required for modification or amendment of the indenture or for waiver of
compliance with certain provisions of the indenture or for waiver of
certain defaults.
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We may
also make modifications and amendments to the indenture for the benefit of
holders without their consent, for certain purposes including, but not limited
to:
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providing
for our successor to assume the covenants under the
indenture;
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·
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adding
covenants or events of default;
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making
certain changes to facilitate the issuance of the
securities;
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·
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securing
the securities;
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·
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providing
for a successor trustee or additional
trustees;
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·
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curing
any ambiguities or inconsistencies;
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·
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providing
for guaranties of, or additional obligors on, the
securities;
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·
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permitting
or facilitating the defeasance and discharge of the securities;
and
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·
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other
changes specified in the indenture.
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The
holders of at least a majority in principal amount of the debt securities of any
series may, on behalf of the holders of all debt securities of that series,
waive our compliance with specified covenants of the indenture. The holders of
at least a majority in principal amount of the debt securities of any series
may, on behalf of the holders of all debt securities of that series, waive any
past default under the indenture with respect to that series,
except:
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a
default in the payment of the principal of, or premium, if any, or
interest on, any debt security of that series;
or
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·
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a
default of a provision of the indenture that cannot be modified or amended
without the consent of the holder of each debt security of that
series.
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Defeasance
Unless
otherwise specified in a prospectus supplement applicable to a particular series
of debt securities and except as described below, upon compliance with the
applicable requirements described below, we:
(1) will be
deemed to have been discharged from our obligations with respect to the debt
securities of that series; or
(2) will be
released from our obligations to comply with certain covenants described in the
indenture with respect to the debt securities of that series, and the occurrence
of an event described in any of clauses (3), (4) and (5) under “— Events of
Default” above will no longer be an event of default with respect to the debt
securities of that series except to the limited extent described
below.
Following
any defeasance described in clause (1) or (2) above, we will continue to have
specified obligations under the indenture, including obligations to register the
transfer or exchange of debt securities of the applicable series; replace
destroyed, stolen, lost, or mutilated debt securities of the applicable series;
maintain an office or agency in respect of the debt securities of the applicable
series; and hold funds for payment to holders of debt securities of the
applicable series in trust. In the case of any defeasance described in clause
(2) above, any failure by us to comply with our continuing obligations may
constitute an event of default with respect to the debt securities of the
applicable series as described in clause (4) under “— Events of Defaults”
above.
In order
to effect any defeasance described in clause (1) or (2) above, we must
irrevocably deposit with the trustee, in trust, money or specified government
obligations (or depositary receipts therefor) that through the payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay all of the principal of, premium, if any, and interest
on the debt securities of such series on the dates such payments are due in
accordance with the terms of such debt securities. In addition:
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no
event of default or event which with the giving of notice or lapse of
time, or both, would become an event of default under the indenture shall
have occurred and be continuing on the date of such
deposit;
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in
the event of any defeasance described in clause (1) above, we shall have
delivered an opinion of counsel, stating that (a) we have received from,
or there has been published by, the IRS a ruling or (b) there has been a
change in applicable federal law, in either case to the effect that, among
other things, the holders of the debt securities of such series will not
recognize gain or loss for United States federal income tax purposes as a
result of such deposit or defeasance and will be subject to United States
federal income tax in the same manner as if such defeasance had not
occurred; and
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in
the event of any defeasance described in clause (2) above, we shall have
delivered an opinion of counsel to the effect that, among other things,
the holders of the debt securities of such series will not recognize gain
or loss for United States federal income tax purposes as a result of such
deposit or defeasance and will be subject to United States federal income
tax in the same manner as if such defeasance had not
occurred.
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If we
fail to comply with our remaining obligations under the indenture with respect
to the debt securities of the applicable series following a defeasance described
in clause (2) above and the debt securities of that series are declared due and
payable because of the occurrence of any undefeased event of default, the amount
of money and government obligations on deposit with the trustee may be
insufficient to pay amounts due on the debt securities of that series at the
time of the acceleration resulting from such event of default. However, we will
remain liable in respect of such payments.
Satisfaction
and Discharge
We, at
our option, may satisfy and discharge the indenture (except for specified
obligations of us and the trustee, including, among others, the obligations to
apply money held in trust) when:
(1) all of
our debt securities previously authenticated and delivered under the indenture
(subject to specified exceptions relating to debt securities that have otherwise
been satisfied or provided for) have been delivered to the trustee for
cancellation; or
(2) all of
our debt securities not previously delivered to the trustee for cancellation
have become due and payable, will become due and payable at their stated
maturity within one year, or are to be called for redemption within one year
under arrangements satisfactory to the trustee for the giving of notice of
redemption by the trustee, and we have deposited or caused to be deposited with
the trustee as trust funds for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such debt securities, for principal and any
premium and interest to the date of such deposit (in the case of debt securities
which have become due and payable) or to the stated maturity or redemption date,
as the case may be;
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we
have paid or caused to be paid all other sums payable by us under the
indenture; and
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we
have delivered to the trustee an officer’s certificate and an opinion of
counsel, each to the effect that all conditions precedent relating to the
satisfaction and discharge of the indenture have been
satisfied.
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Governing
Law
The
indenture and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York.
Regarding
the Trustee
We will
provide the name of the trustee in any prospectus supplement relating to the
issuance of debt securities and we will also provide certain other information
related to the trustee, including describing any relationship we have with the
trustee, in such prospectus supplement. The indenture will contain specified
limitations on the right of the trustee, should it become our creditor within
three months of, or subsequent to, a default by us to make payment in full of
principal of or interest on any series of debt securities issued pursuant to the
indenture when and as the same becomes due and payable, to obtain payment of
claims, or to realize for its own account on property received in respect of any
such claim as security or otherwise, unless and until such default is
cured.
The
indenture will not prohibit the trustee from serving as trustee under any other
indenture to which we may be a party from time to time or from engaging in other
transactions with us. If the trustee acquires any conflicting interest within
the meaning of the Trust Indenture Act of 1939 and there is an event of default
with respect to any series of debt securities, the trustee must eliminate the
conflict or resign.
DESCRIPTION
OF CAPITAL STOCK
Our
authorized capital stock consists of 30,000,000 shares of common stock, par
value $0.01 per share, and 2,000,000 shares of preferred stock, par value $0.01
per share.
Common
Stock
Subject
to the restrictions described below, the holders of our common stock are
entitled to receive dividends from funds legally available when, as and if
declared by our board of directors, and are entitled upon our liquidation,
dissolution or winding up to receive pro rata our net assets after satisfaction
in full of the prior rights of our creditors and holders of any preferred
stock.
Except as
otherwise provided by law and subject to the voting rights of our preferred
stock of any series that may be outstanding from time to time, the holders of
common stock are entitled to one vote for each share held on all matters as to
which stockholders are entitled to vote. The holders of common stock do not have
cumulative voting rights. The holders of common stock do not have any
preferential, subscriptive or preemptive rights to subscribe to or purchase any
new or additional issue of shares of any class of stock or of securities
convertible into our stock or any conversion rights with respect to any of our
securities. Our common stock is not subject to redemption. All of our issued and
outstanding common stock is fully paid and non-assessable.
Preferred
Stock
Our
certificate of incorporation authorizes our board of directors to establish one
or more series of preferred stock and to determine, with respect to any series
of preferred stock, the terms and rights of the series, including the
following:
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the
designation of the series;
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the
rate and time of, and conditions and preferences with respect to,
dividends, and whether the dividends will be
cumulative;
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the
voting rights, if any, of shares of the
series;
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·
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the
price, timing and conditions regarding the redemption of shares of the
series and whether a sinking fund should be established for the
series;
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·
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the
rights and preferences of shares of the series in the event of voluntary
or involuntary dissolution, liquidation or winding up of our affairs;
and
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the
right, if any, to convert or exchange shares of the series into or for
stock or securities of any other series or
class.
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We
currently do not have any shares of preferred stock issued and
outstanding.
Purposes
and Effects of Certain Provisions of Our Certificate of Incorporation and
Bylaws
General
Our
certificate of incorporation and bylaws contain provisions that could make more
difficult the acquisition of control of our company by means of a tender offer,
open market purchases, a proxy contest or otherwise. A description of these
provisions is set forth below.
Preferred
Stock
Our
certificate of incorporation and bylaws contain certain provisions, some of
which are intended to enhance the likelihood of continuity and stability in the
composition of our board of directors and the policies formulated by our board
of directors, and to discourage certain types of coercive takeover practices.
However, these provisions, as well as certain provisions of Delaware law, may
deter, hinder or delay a change of control of us. These provisions could
discourage attempts to acquire us or remove incumbent management even if some or
a majority of our stockholders believe that action is in their best
interest.
Classified
Board of Directors; Removal of Directors
Our
certificate of incorporation divides our board of directors into three classes
of directors, with each class serving staggered, three-year terms. Our
certificate of incorporation provides that our directors may be removed from
office for cause by a vote of a majority in voting power of the then-outstanding
shares of our voting stock entitled to vote in the election of directors, voting
together as a single group. The classification of our board of directors means
that, unless directors are removed by stockholders, it could require at least
two annual meetings of stockholders for a majority of stockholders to make a
change of control of the board of directors, because only a portion of the
directors will be elected at each meeting. In addition, our bylaws provides that
the number of directors cannot be increased by 50% or more in any 12-month
period without the approval of at least 66-23% of the directors then in
office. A significant effect of these provisions may be to deter
hostile takeover attempts, because an acquiror could experience delay in
replacing a majority of the directors. A classified board of directors also
makes it more difficult for stockholders to effect a change of control of the
board of directors, even if such a change of control were to be sought due to
dissatisfaction with the performance of our company’s directors.
Limitation
of Director Liability
Our
certificate of incorporation limits the liability of directors to us and our
stockholders to the fullest extent permitted by Delaware law. Specifically, a
director will not be personally liable for monetary damages for breach of his or
her fiduciary duty as a director, except for liability for:
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any
breach of the director’s duty of loyalty to us or our
stockholders;
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·
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acts
or omissions which involve intentional misconduct, fraud or a knowing
violation of law;
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violations
under Section 174 of the Delaware General Corporation Law, which relates
to unlawful distributions to stockholders or unlawful stock repurchases or
redemptions; or
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any
transaction from which the director derived an improper personal
benefit.
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These
provisions in our certificate of incorporation may have the effect of reducing
the likelihood of derivative litigation against our directors and officers and
may discourage or deter stockholders or management from bringing a lawsuit
against our directors or officers for breach of their duty of care, even though
such an action, if successful, might otherwise have benefited our company and
its stockholders. These provisions do not limit or affect a stockholder’s
ability to seek and obtain relief under federal securities laws.
Special
Meetings of Stockholders
Our
bylaws provide that special meetings of stockholders may be called only by our
board of directors or by one or more stockholders holding shares which, in the
aggregate, entitle them to cast not less than 25% of the votes at the
meeting.
Delaware
Takeover Statute
We are
subject to Section 203 of the DGCL, which, subject to certain exceptions,
prohibits a Delaware corporation from engaging in any “business combination”
with any “interested stockholder” (both as defined below) for a
period of three years following the date that such stockholder became an
interested stockholder, unless: (i) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder,
(ii) on consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the voting stock
outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (iii) on or subsequent
to such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66⅔% of the outstanding voting
stock that is not owned by the interested stockholder.
Section
203 of the DGCL defines generally “business combination” to include: (i) any
merger or consolidation involving the corporation and the interested
stockholder; (ii) any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation involving the interested stockholder; (iii)
subject to certain exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transaction involving the corporation that has the effect
of increasing the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or (v) the receipt
by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an “interested stockholder” as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
Transfer
Agent
The
transfer agent for our common stock is Continental Stock Transfer & Trust
Company.
DESCRIPTION
OF WARRANTS
We may
issue warrants for the purchase of debt securities, preferred stock or common
stock, or any combination thereof. We may issue warrants independently or
together with any other securities offered by a prospectus supplement. Warrants
may be attached to or separate from such securities. Each series of warrants
will be issued under a separate warrant agreement we will enter into with a
warrant agent specified in the applicable prospectus supplement. The warrant
agent will act solely as our agent in connection with the warrants of a
particular series and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of warrants.
The
applicable prospectus supplement will describe the terms of the warrants in
respect of which this prospectus is being delivered, including, to the extent
applicable, the following:
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the
title of the warrants;
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the
aggregate number of the warrants;
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the
price or prices at which the warrants will be
issued;
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the
designation, number or principal amount and terms of the debt securities,
preferred stock and/or common stock, purchasable upon exercise
of the warrants;
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the
designation and terms of the other securities, if any, with which the
warrants are issued and the number of warrants issued with each
security;
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the
date, if any, on and after which the warrants and the related underlying
securities will be separately
transferable;
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whether
the warrants will be issued in registered form or bearer
form;
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the
price at which each underlying security purchasable upon exercise of the
warrants may be purchased;
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the
date on which the right to exercise the warrants will commence and the
date on which that right will
expire;
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the
identity of the warrant agent;
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the
maximum or minimum number of the warrants that may be exercised at any one
time;
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information
with respect to book-entry procedures, if
any;
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a
discussion of any material federal income tax considerations;
and
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any
other terms of the warrants, including terms, procedures, and limitations
relating to the transferability, exchange, and exercise of the
warrants.
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RATIO
OF EARNINGS TO FIXED CHARGES
USE
OF PROCEEDS
We intend
to use the net proceeds from the sales of the securities as set forth in the
applicable prospectus supplement.
PLAN
OF DISTRIBUTION
We may
sell the securities described in this prospectus to or through one or more
agents, underwriters, dealers, in 'at the market offerings', within the meaning
of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an
existing trading market or an exchange or otherwise or directly to purchasers on
a continuous or delayed basis or through a combination of these
methods.
The
distribution of the securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed from time to time,
at market prices prevailing at the times of sale, at prices related to such
prevailing market prices or at negotiated prices.
Each time
that we use this prospectus to sell our securities, we will also provide a
prospectus supplement. For each series of securities, the applicable prospectus
supplement will set forth the terms of the offering including:
• the
public offering price;
• the
name or names of any underwriters, dealers or agents;
• the
purchase price of the securities;
• the
proceeds from the sale of the securities to us;
• any
underwriting discounts, agency fees or other compensation payable to
underwriters or agents;
• any
discounts or concessions allowed or reallowed or repaid to dealers;
and
• the
securities exchange on which the securities will be listed, if any.
If we use
underwriters in the sale of securities, the securities will be acquired by the
underwriters for their own account. The underwriters may then resell the
securities in one or more transactions at a fixed public offering price or at
varying prices determined at the time of sale or thereafter. The securities may
be either offered to the public through underwriting syndicates represented by
managing underwriters, or directly by underwriters. Unless set forth in the
prospectus supplement, the obligations of the underwriters to purchase the
securities will be subject to certain conditions. Unless set forth in the
prospectus supplement, the underwriters will be obligated to purchase all the
securities offered if they purchase any securities. The public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
If we use
dealers in the sale of securities, we will sell securities to such dealers as
principals. The dealers may then resell the securities to the public at varying
prices to be determined by such dealers at the time of resale. We may solicit
offers to purchase the securities directly, and we may sell the securities
directly to institutional or other investors, who may be deemed underwriters
within the meaning of the Securities Act with respect to any resales of those
securities. The terms of these sales will be described in the applicable
prospectus supplement. If we use agents in the sale of securities, unless
otherwise indicated in the prospectus supplement, they will use their reasonable
best efforts to solicit purchases for the period of their appointment. Unless
otherwise indicated in a prospectus supplement, if we sell directly, no
underwriters, dealers or agents would be involved. We will not make an offer of
securities in any jurisdiction that does not permit such an offer.
We may
grant underwriters who participate in the distribution of securities an option
to purchase additional securities to cover overallotments, if any, in connection
with the distribution. Any underwriter may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in accordance with
SEC orders, rules and regulations and applicable law. To the extent permitted by
applicable law and SEC orders, rules and regulations, an overallotment involves
sales in excess of the offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. To the extent permitted by
applicable law and SEC orders, rules and regulations, short covering
transactions involve purchases of the common securities in the open market after
the distribution is completed to cover syndicate short positions in
stabilization transactions or otherwise. Penalty bids permit the underwriters to
reclaim a selling concession from a dealer when the securities originally sold
by the dealer is purchased in a covering transaction to cover syndicate short
positions in stabilization transactions or otherwise. Those activities may cause
the price of the common stock to be higher than it would otherwise be. If
commenced, the underwriters may discontinue any of the activities at any
time.
Any
underwriters who are qualified market makers on the NYSE Amex Stock Exchange may
engage in passive market making transactions in the common stock on the NYSE
Amex Stock Exchange in accordance with Rule 103 of Regulation M, during the
business day prior to the pricing of the offering, before the commencement of
offers or sales of the common stock. Passive market makers must comply with the
applicable volume and price limitations and must be identified as passive market
makers. In general a passive market maker must display its bid at a price not in
excess of the highest independent bid for such security; if all independent bids
are lowered below the passive market maker’s bid, however, the passive market
maker’s bid must then be lowered when certain purchase limits are
exceeded.
Underwriters,
dealers and agents that participate in any distribution of securities may be
deemed to be underwriters as defined in the Securities Act. Any discounts,
commissions or profit they receive when they resell the securities may be
treated as underwriting discounts and commissions under the Securities
Act. We will identify in the applicable prospectus supplement any
underwriters, dealers and agents and will describe their compensation.
Only underwriters named in the prospectus supplement are underwriters of the
securities offered in the prospectus supplement. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including certain liabilities under the Securities Act, or to
contribute with respect to payments that they may be required to
make.
We may
authorize underwriters, dealers or agents to solicit offers from certain
institutions whereby the institution contractually agrees to purchase the
securities from us on a future date at a specific price. This type of contract
may be made only with institutions that we specifically approve. Such
institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers
or agents will not be responsible for the validity or performance of these
contracts.
Each
series of securities will be a new issue of securities and will have no
established trading market, other than our common stock, which is listed on the
NYSE Amex Stock Exchange. Unless otherwise specified in the applicable
prospectus supplement, the securities will not be listed on any exchange. It has
not presently been established whether the underwriters, if any, of the
securities will make a market in the securities. If the underwriters make a
market in the securities, such market making may be discontinued at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the securities.
Agents,
dealers and underwriters may be entitled to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents, dealers or underwriters
may be required to make in respect thereof. Agents, dealers or underwriters may
be customers of, engage in transactions with, or perform services for us and our
subsidiaries in the ordinary course of business.
Pursuant
to requirement of the Finaincial Industry Regulatory Authority, or FINRA, the
maximum commission or discount to be recieved by any FINRA member or independent
broker/dealer may not be greater than 8.0% of the gross proceeds received by us
for the sale of any securties being registered pursuant to SEC Rule
415.
CERTAIN
LEGAL MATTERS
In
connection with particular offerings of the securities in the future, and if
stated in the applicable prospectus supplements, the validity of those
securities may be passed upon for us by Duane Morris LLP. If securities
are distributed in an underwritten offering, certain legal matters will be
passed upon for the underwriters by counsel identified in the applicable
prospectus supplement.
EXPERTS
The
consolidated financial statements of GSE Systems, Inc. as of December 31, 2008
and 2007, and for each of the years in the three-year period ended December 31,
2008, and management’s assessment of the effectiveness of internal control over
financial reporting as of December 31, 2008 have been incorporated by reference
herein and in the registration statement in reliance upon the reports of KPMG
LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. The audit report covering the December 31, 2008 financial
statements refers to the adoption of FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement
No. 109, on January 1, 2007. The audit report on the
effectiveness of internal control over financial reporting as of December 31,
2008, expresses an opinion that GSE Systems, Inc. did not maintain effective
internal control over financial reporting as of December 31, 2008 because of the
effect of a material weakness on the achievement of the objectives of the
control criteria and contains an explanatory paragraph which
describes a material weakness related to the accounting for derivative
instruments.
GSE
SYSTEMS, INC.
$25,000,000
Debt
Securities
Preferred
Stock
Common
Stock
Warrants
PROSPECTUS
____________,
2009
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of
Issuance and Distribution.
The
following table sets forth the expenses in connection with the issuance and
distribution of the securities registered by this registration statement, other
than any underwriting discounts and commissions. All of the expenses will be
borne by us.
SEC
registration
fee
|
|
$1,395
|
Legal
fees and
expenses
|
|
*
|
Accounting
fees and
expenses
|
|
*
|
Printing
and engraving
expenses
|
|
*
|
Trustee’s
fees and
expenses
|
|
*
|
Miscellaneous
expenses
|
|
*
|
Total
|
|
*
|
|
|
|
|
*
|
These
fees and expenses will be determined based on the number of issuances and
amount and type of securities issued. Accordingly, they cannot
be estimated at this time.
|
Item
15. Indemnification
of Directors and Officers.
Under
Section 145 of the General Corporation Law of the State of Delaware (the
“DGCL”), a corporation may indemnify its directors, officers, employees and
agents and its former directors, officers, employees and agents and those who
serve, at the corporation's request, in such capacities with another enterprise,
against expenses (including attorney's fees), as well as judgments, fines and
settlements in no derivative lawsuits, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding in which they or
any of them were or are made parties or are threatened to be made parties by
reason of their serving or having served in such capacity. The DGCL provides,
however, that such person must have acted in good faith and in a manner he or
she reasonably believed to be in (or not opposed to) the best interests of the
corporation and, in the case of a criminal action, such person must have had no
reasonable cause to believe his or her conduct was unlawful. In addition, the
DGCL does not permit indemnification in an action or suit by or in the right of
the corporation, where such person has been adjudged liable to the corporation,
unless, and only to the extent that, a court determines that such person fairly
and reasonably is entitled to indemnity for costs the court deems proper in
light of liability adjudication. Indemnity is mandatory to the extent a claim,
issue or matter has been successfully defended.
The
Company's Fourth Amended and Restated Certificate of Incorporation (the
“Restated Certificate”) provides that the Company shall indemnify and hold
harmless, to the fullest extent permitted by Section 145 of the DGCL, as the
same may be amended and supplemented, every person who was or is made a party or
is threatened to be made a party or is otherwise involved in any action, suit of
proceeding by reason of the fact that such person is or was serving as a
director or officer of the Company or, while serving as a director or officer of
the Company, is or was serving at the request of the Company as a director,
trustee, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith if such
person satisfied the applicable level of care to permit such indemnification
under the DGCL. The Restated Certificate provides that, subject to any
requirements imposed by law or the Company's Bylaws, the right to
indemnification includes the right to be paid expenses incurred in defending any
proceeding in advance of its final disposition. The Company's Amended and
Restated By-Laws (the “By-Laws”) provide that, if and to the extent required by
the DGCL, such an advance payment will only be made upon delivery to the Company
of an undertaking, by or on behalf of the director or officer, to repay all
amounts so advanced if it is ultimately determined that such director is not
entitled to indemnification.
Section
102(b)(7) of the DGCL permits a corporation to include in its certificate of
incorporation a provision eliminating or limiting the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The
Restated Certificate also provides that a director shall, to the maximum extent
permitted by Section 102(b)(7) of the DGCL (or any successor provision), have no
personal liability to the Company or its shareholders for monetary damages for
breach of fiduciary duty as a director.
Item
16. Exhibits.
The
following documents are filed as exhibits to this registration statement,
including those exhibits incorporated herein by reference to one of our prior
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, as indicated in parentheses:
Exhibit
No.
|
|
Description
|
|
|
|
*1.1
|
|
Form
of Underwriting Agreement.
|
4.1
|
|
Fourth
Amended and Restated Articles of Incorporation of GSE Systems,
Inc. (Incorporated by reference to Exhibit B to our
Definitive Proxy Statement filed on November 20, 2007.)
|
4.2
|
|
Amended
and Restated Bylaws of GSE Systems, Inc.. (Incorporated by
reference to Exhibit A to our Definitive Proxy Statement filed on November
20, 2007.)
|
*4.3
|
|
Form
of Indenture between GSE Systems, Inc and the Trustee to be designated
therein relating to debt securities.
|
*4.4
|
|
Form
of certificate of designations for preferred stock.
|
*4.5
|
|
Form
of warrant.
|
*4.6
|
|
Form
of warrant agreement.
|
5.1
|
|
Opinion
of Duane Morris LLP.
|
*12.1
|
|
Statement
regarding computation of ratio of earnings to fixed
charges.
|
23.1
|
|
Consent
of KPMG LLP.
|
23.2
|
|
Consent
of Duane Morris LLP (included in Exhibit 5.1).
|
24.1
|
|
Power
of Attorney (included on the signature page hereto for GSE Systems,
Inc.)
|
*25.1
|
|
Form
T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the
Indenture.
|
_______________
*
|
To
be filed by an amendment or as an exhibit to a document filed under the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or otherwise filed, and incorporated by reference
herein.
|
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1) To file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of this registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to
such information in this registration statement; provided, however, that
paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is part of
the registration statement.
(2) That, for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
(4) That, for
the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement as
of the earlier of the date such form of prospectus is first used after
effectiveness or date of the first sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which the prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering
thereof. Provided,
however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date.
(5) That, for
the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities, in a
primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any free
writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any other
communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(6) That, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(7) To file
an application for the purpose of determining the eligibility of the trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted against
the registrant by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the undersigned registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sykesville, State of Maryland, on August 6,
2009.
|
By:
|
/s/
John V. Moran
|
|
Name:
John V. Moran
Title:
Chief Executive Officer
|
POWER
OF ATTORNEY
The
undersigned directors and officers of GSE Systems, Inc. hereby constitute and
appoint [John V. Moran and Jeffery G. Hough], and each of them, each with full
power to act and with full power of substitution and resubstitution, our true
and lawful attorneys-in-fact and agents with full power to execute in our name
and behalf in the capacities indicated below any and all amendments (including
post-effective amendments and amendments thereto) to this registration statement
and to file the same, with all exhibits and other documents relating thereto and
any registration statement relating to any offering made pursuant to this
registration statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act with the Securities and Exchange Commission and
hereby ratify and confirm all that such attorney-in-fact or his or her
substitute shall lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed below by the following persons in the capacities and on the
dates indicated.
/s/
John V. Moran |
Chief
Executive Officer and Vice Chairman of the Board (Principal Executive
Officer)
|
August
6, 2009 |
John
V. Moran
|
|
|
/s/
Jeffery G. Hough |
Senior
Vice President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
August
6, 2009 |
Jeffery
G. Hough
|
|
|
/s/
Jerome I. Feldman |
Chairman
of the Board |
August
6, 2009 |
Jerome
I. Feldman
|
|
|
/s/
Michael D. Feldman |
Director |
August
6, 2009 |
Michael
D. Feldman
|
|
|
|
Director |
August
6, 2009 |
Dr.
Sheldon L. Glashow
|
|
|
/s/
Jane Bryant Quinn |
Director |
August
6, 2009 |
Jane
Bryant Quinn
|
|
|
|
Director |
August
6, 2009 |
Dr.
Roger Hagengruber
|
|
|
/s/
Joseph W. Lewis |
Director |
August
6, 2009 |
Joseph
W. Lewis
|
|
|
/s/
George J. Pedersen |
Director |
August
6, 2009 |
George
J. Pedersen
|
|
|
/s/
Orrie Lee Tawes III |
Director |
August
6, 2009 |
Orrie Lee Tawes
III
|
|
|
EXHIBIT
INDEX
Exhibit
No.
|
|
Description
|
*1.1
|
|
Form
of Underwriting Agreement.
|
4.1
|
|
Fourth
Amended and Restated Articles of Incorporation of GSE Systems,
Inc. (Incorporated by reference to Exhibit B to our
Definitive Proxy Statement filed on November 20, 2007.)
|
4.2
|
|
Amended
and Restated Bylaws of GSE Systems, Inc.. (Incorporated by
reference to Exhibit A to our Definitive Proxy Statement filed on November
20, 2007.)
|
*4.3
|
|
Form
of Indenture between GSE Systems, Inc and the Trustee to be designated
therein relating to debt securities.
|
*4.4
|
|
Form
of certificate of designations for preferred stock.
|
*4.5
|
|
Form
of warrant.
|
*4.6
|
|
Form
of warrant agreement.
|
5.1
|
|
Opinion
of Duane Morris LLP.
|
*12.1
|
|
Statement
regarding computation of ratio of earnings to fixed
charges.
|
23.1
|
|
Consent
of KPMG LLP.
|
23.2
|
|
Consent
of Duane Morris LLP (included in Exhibit 5.1).
|
24.1
|
|
Power
of Attorney (included on the signature page hereto for GSE Systems,
Inc.)
|
*25.1
|
|
Form
T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the
Indenture.
|
*
|
To
be filed by an amendment or as an exhibit to a document filed under the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or otherwise filed, and incorporated by reference
herein
|
II-7