SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): MAY 1, 1997
PRIDE PETROLEUM SERVICES, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 0-16961 76-0069030
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1500 CITY WEST BLVD., SUITE 400
HOUSTON, TEXAS 77042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713/789-1400
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ITEM 5. OTHER EVENTS.
The Underwriting Agreements dated May 1, 1997 and May 2, 1997 by and
among Pride Petroleum Services, Inc. (the "Company") and the underwriters listed
on the respective schedules 1 thereto, which relate, respectively, (i) to the
offering of 4,300,000 shares of the Company's common stock, no par value
("Common Stock"), together with up to 645,000 shares of Common Stock subject to
an underwriters' overallotment option, and (ii) to the offering of $325 million
principal amount of the Company's 93/8% Senior Notes due 2007 (the "Notes"),
each of which under the Company's Registration Statement of Form S-3
(Registration No. 333-21385), are being filed as exhibits to this report. A form
of Supplemental Indenture between the Company and The Chase Manhattan Bank, as
trustee, relating to the Notes and a form of Note are also being filed as
exhibits to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
1.1 -- Underwriting Agreement dated as of May 1, 1997 by and between
Pride Petroleum Services, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc., Robert W.
Baird & Co. Incorporated, Morgan Keegan & Company, Inc., Simmons
& Company International and Southcoast Capital Corporation, as
representatives of the underwriters named on schedule 1 thereto.
1.2 -- Underwriting Agreement dated as of May 2, 1997 by and between
Pride Petroleum Services, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Jefferies & Company, Inc., Robert W.
Baird & Co. Incorporated, Morgan Keegan & Company, Inc., Simmons
& Company International and Southcoast Capital Corporation, as
representatives of the underwriters named on schedule 1 thereto.
4.1 -- Form of Supplemental Indenture between Pride Petroleum Services,
Inc. and The Chase Manhattan Bank, as trustee.
4.2 -- Form of Note (contained in Exhibit 4.1).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRIDE PETROLEUM SERVICES, INC.
By: /s/ EARL W. MCNIEL
Earl W. McNiel
Vice President and Chief Financial Officer
Date: May 6, 1997
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4,300,000 Shares
Pride Petroleum Services, Inc.
Common Stock
UNDERWRITING AGREEMENT
May 1, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
MORGAN KEEGAN & COMPANY, INC.
SIMMONS & COMPANY INTERNATIONAL
SOUTHCOAST CAPITAL CORPORATION
As representatives (the "Representatives") of the
several underwriters
named in Schedule I hereto
140 Broadway
New York, New York 10005
Ladies and Gentlemen:
Pride Petroleum Services, Inc., a Louisiana corporation (the "COMPANY"),
confirms its agreement with the several underwriters listed in Schedule I hereto
(the "UNDERWRITERS") as follows.
1. THE SHARES. Subject to the terms and conditions herein set forth, the
Company proposes to issue and sell 4,300,000 shares of its common stock, no par
value, (the "FIRM SHARES") to the Underwriters. The Company also proposes to
issue and sell to the several Underwriters not more than 645,000 additional
shares of its common stock, no par value, (the "ADDITIONAL SHARES") if requested
by the Underwriters as provided in Section 3 hereof. The Firm Shares and the
Additional Shares are herein collectively called the "Shares". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock."
2. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions of
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the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "ACT"), a registration statement on
Form S-3, including a base prospectus relating to the Shares and certain other
securities. The registration statement as amended at the time when it became
effective on April 4, 1997, including a registration statement (if any) filed
pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the Registration Statement; and the base
prospectus dated April 4, 1997, as supplemented by the prospectus supplement
relating to the Shares in the form first used to confirm sales of Shares is
hereinafter referred as the Prospectus. Any reference in this Agreement to the
Registration Statement, a preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the effective date of the
Registration Statement or the date of such Preliminary Prospectus or the
Prospectus.
3. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at a price per share of
$16.19 (the "PURCHASE PRICE") the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 645,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date (as
hereinafter defined), (ii) no later than ten business days after such notice has
been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
The Company hereby agrees, and, concurrently with the execution of this
Agreement, shall deliver a letter executed by each of the current directors and
executive officers of the Company pursuant to which such directors and executive
officers agree that, for a period of 90 days after the date of the Prospectus,
without the prior written consent of DLJ on behalf of the Representatives,
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neither the Company, nor such directors and executive officers, will, directly
or indirectly, offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose of any shares of common stock of the Company (the "COMMON
STOCK"), or any securities convertible into or exercisable or exchangeable for,
or warrants, options or rights to purchase or acquire, Common Stock or enter
into any agreement to do any of the foregoing, except pursuant to this
Agreement. Notwithstanding the foregoing, during such period (x) the Company may
grant stock options pursuant to the Company's currently existing stock option
plans, and (y) the directors, officers and other stockholders subject to such
agreements may transfer or otherwise dispose of shares of Common Stock pursuant
to BONA FIDE gifts, provided that, prior to any such transfers or dispositions
referred to in this clause (y), the transferee delivers to DLJ, on behalf of the
Underwriters, a written agreement pursuant to which such transferee agrees to be
bound by the terms of such agreement as if a signatory thereto.
4. TERMS OF THE PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
5. DELIVERY AND PAYMENT. Payment for the Firm Shares shall be made at
10:00 A.M., New York City time, on the third business day (or fourth business
day if permitted by Rule 15c6-1(c) of the Securities Exchange Act of 1934, as
amended, including the rules and regulations thereunder (the "EXCHANGE ACT"))
(such time and date being referred to as the "CLOSING DATE") following the
initial public offering of the Firm Shares as advised by you to the Company, at
such place as you shall designate. The Closing Date and the location of delivery
of and the form of payment for the Firm Shares may be varied by agreement
between you and the Company.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at such place as you
shall designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of and
the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
Unless otherwise directed by you, payment of the Purchase Price
shall be made to the Company by wire transfer of immediately available funds to
a bank account designated by the Company against delivery to you for the
respective accounts of the several Underwriters of the Shares. Unless you direct
that the Shares will be issued in book-entry form, Certificates for the Shares
shall be registered in such names and issued in such denominations as you shall
request in writing not later than two full business days prior to the Closing
Date or an Option Closing Date, as the case may be. Such certificates shall be
made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date or the applicable
Option Closing Date, as the case may be. Certificates in definitive form
evidencing the Shares shall be delivered to you on the Closing Date or the
applicable Option Closing Date, as the case may be,
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with any transfer taxes thereon duly paid by the Company, for the respective
accounts of the several Underwriters, against payment of the Purchase Price
therefor. If the Shares will be issued in book-entry form, the Company shall
deposit the global certificate representing the Shares with the Depository Trust
Company ("DTC"), or its designated custodian at the Closing Date, and the
Company will deliver such global certificate to the several Underwriters by
causing DTC to credit the Shares to the respective accounts of the Underwriters
at DTC.
6. AGREEMENTS OF THE COMPANY. The Company agrees with you that:
(a) It will, if necessary or required by law, file an amendment to
the Registration Statement or, if necessary pursuant to Rule 430A under
the Act, a post-effective amendment to the Registration Statement, as soon
as practicable after the execution and delivery of this Agreement, and
will use its best efforts to cause the Registration Statement or such
post-effective amendment to become effective at the earliest possible
time. The Company will comply fully and in a timely manner with the
applicable provisions of Rule 424 and Rule 430A under the Act.
(b) It will advise you promptly and, if requested by you, confirm
such advice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmission to the Commission for
filing of any supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the Prospectus and to
furnish you with copies thereof, (iii) of the receipt of any comments from
the Commission that relate to the Registration Statement or requests by
the Commission for amendments to the Registration Statement or amendments
or supplements to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (v) of the
happening of any event during the period referred to in paragraph (e)
below which makes any Statement of a material fact made in the
Registration Statement (as amended or supplemented from time to time)
untrue or which requires the making of any additions to or changes in the
Registration Statement (as amended or supplemented from time to time) in
order to make the statements therein not misleading or that makes any
statement of a material fact made in the Prospectus (as amended or
supplemented from time to time) untrue or which requires the making of any
additions to or changes in the Prospectus (as amended or supplemented from
time to time) in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of the Shares under any state securities or Blue Sky laws, the
Company shall, if reasonably requested by you, use every reasonable effort
to obtain the withdrawal or lifting of such order at the earliest possible
time.
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(c) It will furnish to the Underwriters without charge two (2)
signed copies of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits filed
therewith or incorporated by reference therein, and will furnish to you
and each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) It will not file any amendment to the Registration Statement, or
make any amendment or supplement to the Prospectus, of which you shall not
previously have been advised and provided a copy prior to the filing or
making thereof or to which you shall reasonably object; and it will
prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or any amendment or
supplement to the Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by you, and will use
its best efforts to cause the same to become effective as promptly as
possible.
(e) For such period as in the opinion of counsel for the
Underwriters a prospectus is required by the Act to be delivered in
connection with sales by an Underwriter or a dealer, it will furnish to
each Underwriter and dealer without charge as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as such
Underwriter or dealer may reasonably request for the purposes contemplated
by the Act.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
existing as of the date the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Act, it will, as promptly as practicable, prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances existing as of
the date the Prospectus is so delivered, be misleading, and so that the
Prospectus and will comply with the Act, and will furnish to each
Underwriter and to such dealers as you shall specify without charge such
number of copies thereof as such Underwriter and such dealers may
reasonably request.
(g) Prior to any public offering of the Shares, it will cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request (provided, that the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to take any action that
would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject). The Company will continue
such
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qualification in effect so long as required by law for distribution of the
Shares and will file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification (provided, that the Company shall not be obligated to take
any action that would subject it to general consent to service of process
in any jurisdiction in which it is not now so subject).
(h) It will make generally available to its security holders as soon
as reasonably practicable a consolidated earnings statement covering a
period of at least twelve months beginning after the "effective date" (as
defined in Rule 158 under the Act) of the Registration Statement (but in
no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder
and will advise you in writing when such statement has been so made
available.
(i) It will timely complete all required filings and otherwise
comply fully in a timely manner with all provisions of the Securities
Exchange Act of 1934, as amended, including the rules and regulations
thereunder (collectively, the "Exchange Act"), to cause the Shares to be
registered pursuant thereto.
(j) During the period of five years after the date of this
Agreement, to furnish to you as soon as available a copy of each report or
other publicly available information of the Company mailed to the holders
of its Common Stock or filed with the Commission and such other publicly
available information concerning the Company and its Subsidiaries as you
may reasonably request.
(k) It will use the proceeds from the sale of the Shares in the
manner described in the Prospectus under the Caption "Use of Proceeds."
(l) It has not taken and will not take, directly or indirectly, any
action designed, or that might reasonably be expected, to cause or result
in stabilization or manipulation of the market price of the Common Stock
to facilitate the sale or resale of the Shares.
(m) It will use its best efforts to do and perform all things
required to be done and performed under this Agreement by it prior to or
after the Closing Date or any Option Closing Date and to satisfy all
conditions precedent to the delivery of the Shares.
(n) To use its best efforts to maintain the inclusion of such Common
Stock in the NASDAQ National Market System (or on a national securities
exchange) for a period of five years after the effective date of the
Registration Statement.
7. PAYMENT OF EXPENSES. The Company agrees with you that whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, the Company will pay and be responsible for all costs, expenses,
fees and taxes incident to (i) the preparation,
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printing, filing and distribution under the Act of the Registration Statement
(including financial statements and exhibits), each preliminary prospectus and
all amendments and supplements to any of them prior to or during the period
specified in paragraph 6(e), (ii) the printing and delivery of the Prospectus
and all amendments or supplements to it during the period specified in paragraph
(e), (iii) the printing and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection with the
offering of the Shares (including in each case any disbursements of counsel for
the Underwriters relating to such printing and delivery), (iv) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states (including in each case the fees and
disbursements of counsel for the Underwriters relating to such registration or
qualification and memoranda relating thereto), (v) filings and clearance with
the National Association of Securities Dealers, Inc. in connection with the
offering, (vi) the listing of the Shares on the National Association of
Securities Dealers Automated Quotation system ("NASDAQ") National Market System
and (vii) furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold.
8. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants
to each Underwriter that:
(i) The Registration Statement has become effective and at the
date of the Prospectus (if different), including at the date of any
post-effective amendment or supplement, the Registration Statement will
comply in all material respects with the provisions of the Act, and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus (and any supplements or
amendments thereto) will at all such times comply in all material respects
with the provisions of the Act and will not at any such time contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph 8(i) shall not
apply to (A) statements in or omissions from the Registration Statement or
the Prospectus (or any supplement or amendment to any of them) based upon
and conforming with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein. The Company acknowledges for
all purposes under this Agreement (including this paragraph and Section 9
hereof) that the statements set forth in the first (including the table),
second and final paragraphs of the section entitled "Underwriting" in the
Prospectus constitute the only written information furnished to the
Company by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus or any preliminary prospectus (or any
amendment or supplement to any of them) and that the Underwriters shall
not be deemed to have provided any information (and
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therefore are not responsible for any statements or omissions) pertaining
to any arrangement or agreement with respect to any party other than the
Underwriters. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is not described and filed as
required.
(ii) The documents incorporated by reference in the
Registration Statement or and the Prospectus pursuant to Item 12 of Form
S-3 under the Act, at the time they became effective or at the time they
were filed with the Commission, or to the extent such documents were
subsequently amended prior to the date hereof, at the time so amended,
complied and will comply in all material respects with the requirements of
the Exchange Act and, when read together and with the other information in
the Prospectus do not and will not on the date hereof and at the Closing
Date and the Option Closing Date, as the case may be, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were or are made, not
misleading.
(iii) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 or 430A under the Act, complied
when so filed in all material respects with the provisions of the Act and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) Each "significant subsidiary" (as such term is defined in
Regulation S-X under the Exchange Act) of the Company is listed on Exhibit
21 to the Annual Report on Form 10-K of the Company for the year ended
December 31, 1996 or is described in the Registration Statement as having
been acquired after December 31, 1996. The Company and each of its the
subsidiaries listed on Schedule II hereto (the "SUBSIDIARIES") has been
duly organized, is validly existing and in good standing under the laws of
its jurisdiction of organization and has full corporate power and
authority to carry on its business as it is currently being conducted
(and, in the case of the Company, to authorize the offering of the Shares
and to issue, sell and deliver the Shares), and is duly qualified and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect (as defined
below).
(v) All of the issued and outstanding shares of capital stock
of each of the Subsidiaries has been duly authorized and validly issued
and are owned directly or indirectly by the Company, subject to such
minimum minority ownership interests in the non-U.S. Subsidiaries as may
be required under applicable law. All such shares are fully paid and
nonassessable, and, except as disclosed in the Prospectus, are owned by
the Company free and clear of any security interest, mortgage, pledge,
claim, lien, encumbrance or adverse
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interest of any nature (each, a "LIEN"). There are no outstanding
subscriptions, rights, warrants, options, calls, convertible or
exchangeable securities, commitments of sale, or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interests in, any Subsidiary.
(vi) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"; all
the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable and not
subject to any preemptive or similar rights; except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company convertible into or exchangeable for any capital stock of the
Company, (b) warrants, rights or options to subscribe for or purchase from
the Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (c) obligations of the Company to issue any
shares of capital stock, any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options; all offers and
sales of the Company's capital stock by the Company prior to the date
hereof were at all relevant times duly registered under the Act or exempt
from the registration requirements of the Act and were duly registered or
the subject of an available exemption from the registration requirements
of the applicable state securities or Blue Sky laws; the capital stock of
the Company, including the Common Stock, conforms in all material respects
to all statements relating thereto in the Prospectus and the Registration
Statement.
(vii) Neither the Company nor any Subsidiary is in violation
of or in default under (a) its charter or bylaws or (b) any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or other contract, lease or other instrument to
which it is a party or by which it is bound, or to which any of its
property or assets is subject, which could reasonably be expected to have
a material adverse effect, singly or in the aggregate, on the business,
results of operations, financial condition or business affairs, of the
Company and the Subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"). No contract or other document of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is not so described or filed
as required.
(viii)This Agreement has been duly and validly authorized,
executed and delivered by the Company, and constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms (except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or public
policy relating thereto).
(ix) The execution and delivery of this Agreement and the
issuance and sale of the Shares, the performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby will not
require any consent, approval,
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authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except for such consents as have been
obtained and except as such may be required under the securities or Blue
Sky laws of the various states) and will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default or
cause an acceleration of any obligation under, (A) the charter or bylaws
of the Company or any Subsidiary, (B) any bond, note, debenture or other
evidence of indebtedness or any indenture, mortgage, deed of trust or
other contract, lease or other instrument to which the Company or any
Subsidiary is a party or by which any of them is bound, or to which any of
the property or assets of the Company or any Subsidiary is subject, which
could reasonably be expected to have a Material Adverse Effect, (C) any
order of any court or governmental agency or authority entered in any
proceeding to which the Company or any Subsidiary is a party or by which
any of them is bound, or (D) violate or conflict with any applicable
foreign, Federal, state or local law, rule, administrative regulation or
ordinance or administrative or court decree applicable to the Company or
any Subsidiary or any of its their respective property.
(x) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any court or governmental agency or body
pending against the Company or any of its Subsidiaries that is required to
be disclosed in the Registration Statement or the Prospectus, or which
could reasonably be expected to have a Material Adverse Effect, or
materially and adversely affect the performance of the Company's
obligations pursuant to this Agreement and, to the best of the Company's
knowledge, no such proceedings are contemplated or threatened. No action
has been taken with respect to the Company or any Subsidiary, and no
statute, rule or regulation or order has been enacted, adopted or issued
by any governmental agency and no injunction, restraining order or other
order of any court of competent jurisdiction has been issued with respect
to the Company or any Subsidiary that prevents the issuance of the Shares,
suspends the effectiveness of the Registration Statement, prevents or
suspends the use of any preliminary prospectus or the Prospectus or
prevents or suspends the sale of the Shares in any of the jurisdictions
that you may have specified pursuant to Section 6(g) hereof; no action,
suit or proceeding before any court or arbitrator or any governmental
body, agency or official (domestic or foreign), is pending against or, to
the knowledge of the Company, threatened against, the Company or any
Subsidiary that, if adversely determined, could reasonably be expected to
(a) interfere with or adversely affect the issuance of the Shares or (b)
in any manner invalidate this Agreement; and every request of the
Commission, or any securities authority or agency of any jurisdiction, for
additional information to be included in the Registration Statement or the
Prospectus or otherwise has been complied with in all material respects.
(xi) Coopers & Lybrand L.L.P., the firm of accountants that
has certified the applicable consolidated financial statements and
supporting schedules of the Company filed with the Commission as part of
or incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the
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Company and the Subsidiaries, as required by the Act. Ernst & Young Audit,
Price Waterhouse and Pistrelli, Diaz & Associados are independent public
accountants with respect to certain Subsidiaries of the Company. The
consolidated financial statements, together with related schedules and
notes, set forth or incorporated by reference in the Prospectus and the
Registration Statement comply as to form in all material respects with the
requirements of the Act. Such financial statements fairly present in all
material respects the consolidated financial position of the Company and
the Subsidiaries at the respective dates indicated and the results of
their operations and their cash flows for the respective periods
indicated, and have been prepared in accordance with generally accepted
accounting principles ("GAAP"), except as otherwise expressly stated
therein, as consistently applied throughout such periods. The other
financial and statistical information and data included or incorporated by
reference in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurate and prepared on a
basis consistent with such financial statements and the books and records
of the Company. Each of the Company and its Subsidiaries keeps books and
records that fairly reflect its assets and maintains internal accounting
controls which provide reasonable assurance that (a) transactions are
executed in accordance with management's authorization, (b) transactions
are recorded as necessary to permit preparation of the Company's
consolidated financial statements in accordance with generally accepted
accounting principles and to maintain accountability for the assets of the
Company, (c) access to the assets of the Company and each of its
Subsidiaries is permitted only in accordance with management's
authorization, and (d) the recorded accountability for assets of the
Company and each of its Subsidiaries is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences.
(xii) Except as disclosed in the Registration Statement,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any
Subsidiary has incurred any liabilities or obligations, direct or
contingent, that are material to the Company and the Subsidiaries, taken
as a whole, nor entered into any transaction not in the ordinary course of
business that is material to the Company and the Subsidiaries, taken as a
whole, and is required to be disclosed on a balance sheet in accordance
with GAAP, either when considered alone or together with all other such
transactions, (ii) there has been no decision or judgment in the nature of
litigation adverse to the Company or any Subsidiary that could reasonably
be expected to have a Material Adverse Effect, and (iii) there has been no
material adverse change in the financial condition or in the results of
operations, business affairs or business prospects of the Company and the
Subsidiaries, taken as a whole (any of the above, a "MATERIAL ADVERSE
CHANGE").
(xiii) The Company and each of its Subsidiaries has such
certificates, permits, licenses, approvals, authorizations and other
rights (collectively, "PERMITS") including, without limitation, under any
Environmental Laws (as defined below), issued by
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governmental or regulatory authorities as are, in all material respects,
necessary to own, lease and operate their respective properties and to
conduct their respective businesses; the Company and each of its
Subsidiaries has fulfilled and performed all of its material obligations
with respect to such Permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results or would result in any other material impairment of the
rights of the holder of any such Permit; and, except as described in the
Prospectus, such Permits contain no restrictions that are materially
burdensome to the Company and its Subsidiaries considered as a whole.
(xiv) All material tax returns required to be filed by the
Company and the Subsidiaries in every jurisdiction have been filed, other
than those filings being contested in good faith, and, except as disclosed
in the Prospectus, all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from such entities have been paid.
(xv) Except as would not, individually or in the aggregate,
have a Material Adverse Effect (a) neither the Company nor any Subsidiary
is in violation of any foreign, Federal, state or local laws and
regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of toxic or hazardous substances,
materials or wastes, or petroleum and petroleum products ("MATERIALS OF
ENVIRONMENTAL CONCERN"), or otherwise relating to the storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"ENVIRONMENTAL LAWS"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations; (b)
neither the Company nor any Subsidiary has received any communication
(written or oral), whether from a governmental authority or otherwise,
alleging any such violation or noncompliance, and there are no
circumstances, either past, present or that are reasonably foreseeable,
that may lead to such violation in the future; (c) there is no pending or
threatened claim, action, investigation or notice (written or oral) by any
person or entity alleging potential liability for investigatory, cleanup,
or governmental responses costs, or natural resources or property damages,
or personal injuries, attorney's fees or penalties relating to (x) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location owned or operated by the Company or
any Subsidiary, now or in the past, or (y) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law
(collectively, "ENVIRONMENTAL CLAIMS"); and (d) there are no past or
present actions, activities, circumstances, conditions, events or
incidents, that could form the basis of any Environmental Claim against
the Company or any Subsidiary or against any person or entity whose
liability for any Environmental Claim the Company or any Subsidiary has
retained or assumed either contractually or by operation of law.
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(xvi) Except as would not have a Material Adverse Effect, (A)
neither the Company nor any Subsidiary is in material violation of any
Federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable wage or hour laws nor any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder, (B) there is
no unfair labor practice complaint pending against the Company or any
Subsidiary or, to the best knowledge of the Company, threatened against
any of them, before the National Labor Relations Board or any state or
local labor relations board, and (C) there is no labor dispute in which
the Company or any Subsidiary is involved nor, to the best knowledge of
the Company, is any labor dispute imminent, other than routine
disciplinary and grievance matters.
(xvii)Except as otherwise set forth in the Prospectus or such
as would not have a Material Adverse Effect, the Company and each
Subsidiary has good and marketable title, free and clear of all Liens
(except Liens for taxes not yet due and payable), to all prop erty and
assets described in the Registration Statement as being owned by it. All
leases to which the Company or any Subsidiary is a party are valid and
binding and no default has occurred or is continuing thereunder, which
might result in a Material Adverse Effect, and the Company and each
Subsidiary enjoy peaceful and undisturbed possession under all such leases
to which any of them is a party as lessee with such exceptions as do not
materially interfere with the use made by the Company or such Subsidiary.
(xviii) The Company and its Subsidiaries maintain what they
believe to be reasonably adequate insurance coverage for those risks that
the Company believes to be customarily insured against by companies in the
same business.
(xix) Except for the Registration Rights Agreement between the
Company and Ackermans & van Haaran Group and Soletanche Group, no holder
of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company. No holder of
any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company as part of or
under the Registration Statement.
(xx) Neither the Company nor any Subsidiary is a party to any
agreement that currently prohibits, directly or indirectly, any Subsidiary
from paying any dividends to the Company, from making any other
distributions on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary or from transferring any
of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company, except as disclosed in the Prospectus.
(xxi) The Company and the Subsidiaries own or possess the
right to use all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade
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names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses, and the Company
is not aware of any claim to the contrary or any challenge by any other
person to the right of the Company and the Subsidiaries with respect to
the foregoing.
(xxii)The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xxiii) The conditions for use of a Registration Statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respects to the Company and the transactions contemplated
by this Agreement and the Registration Statement.
(xxiv)To the knowledge of the Company after inquiry of its
executive officers and directors, there are no direct or indirect
associations or affiliations with any member of the NASD among the
Company's executive officers, directors or principal stockholders, except
as set forth in the Registration Statement or as otherwise disclosed to
the Underwriters.
(xxv) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, (i) each of
the Underwriters and (ii) each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) any of
the Underwriters (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "CONTROLLING PERSON") (any person referred to
in clause (i) or (ii) may hereinafter be referred to as an "INDEMNIFIED
PERSON") to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, actions and expenses (including
without limitation and as incurred, reimbursement of all reasonable costs
of investigating, preparing, pursuing, or defending any claim or action,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of
counsel employed by any Indemnified Person in accordance with the
provisions of this Section 9) directly or indirectly caused by, related
to, based upon or arising out of, or in connection with any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (including, in each case, any
amendment or supplement thereto) or any preliminary prospectus, or any
omission or alleged omission to state therein a material
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fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by an untrue statement
or omission or alleged untrue statement or omission that is made in
reliance upon and in conformity with information relating to any
Underwriter furnished in writing to the Company through the
Representatives by or on behalf of any such Underwriter expressly for use
therein; PROVIDED that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages,
liabilities, actions or expenses purchased Shares, or any controlling
person of such Underwriter, if a copy of the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) had not been sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the
sale of Shares to such person by such Underwriter and the untrue statement
or omission (or alleged untrue statement or omission) of a material fact
in such preliminary prospectus was corrected in the Prospectus (as amended
or supplemented).
(b) In case any action or proceeding (including any governmental
investigation) shall be brought or asserted against any of the Indemnified
Persons with respect to which indemnity may be sought against the Company,
such Underwriter (or the Underwriter controlled by such controlling
person) shall promptly notify the Company in writing (provided, that the
failure to give such notice shall not relieve the Company of any liability
which it may have pursuant to this Agreement, unless and only to the
extent that such omission results in the loss or compromise of any
material rights or defenses by the Company). Upon receiving such notice,
the Company shall be entitled to participate in any such action or
proceeding and to assume, at its sole expense, the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person and, after
written notice from the Company to such Indemnified Person of its election
so to assume the defense thereof, the Company shall not be liable to such
Indemnified Person hereunder for legal expenses of other counsel
subsequently incurred by such Indemnified Person in connection with the
defense thereof, other than reasonable costs of investigation unless (i)
the Company agrees in writing to pay such fees and expenses, or (ii) the
Company fails promptly to assume such defense or fails to employ counsel
reasonably satisfactory to such Indemnified Person or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both such Indemnified Person and the Company or an affiliate of
the Company, and such Indemnified Person shall have been advised by
counsel either (x) that there may be one or more legal defenses available
to such Indemnified Person that are different from or additional to those
available to the Company or such affiliate or (y) a conflict may exist
between such Indemnified Person and the Company or such affiliate (in
which case, if such Indemnified Person notifies the Company in writing,
the Company shall not have the right to assume the defense thereof), it
being understood, however, that the Company shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings arising out of the same general allegations
or circumstances,
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<PAGE>
be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for each
such Indemnified Person. The Company shall be liable for any settlement of
any such action or proceeding effected with the prior written consent of
the Company, which consent will not be unreasonably withheld, and the
Company agrees to indemnify and hold harmless any Indemnified Person from
and against any loss, claim, damage, liability or expense by reason of any
such settlement. Notwithstanding the immediately preceding sentence, if in
any case where the fees and expenses of counsel are at the expense of the
indemnifying party and an Indemnified Person shall have requested the
indemnifying party to reimburse the Indemnified Person for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its
written consent if (i) such settlement is entered into more than 30 days
after the receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall have failed to reimburse the
Indemnified Person in accordance with such request for reimbursement (or,
if within 30 days of the receipt of the aforesaid request, the
indemnifying party shall have made a good faith written challenge to the
reasonableness of the amount or nature of the reimbursement requested or
the sufficiency of the documentation supporting the reimbursement
requested (which challenge shall specifically set forth the amount or
nature of the requested reimbursement which the indemnifying party in good
faith believes to be unreasonable or the basis for the good faith claim as
to the insufficiency of any supporting documentation), in which event this
clause (ii) shall apply if then such indemnifying party shall not have
reimbursed the indemnified party for the amount which is not being so
challenged) prior to the date of such settlement. The Company shall not,
without the prior written consent of each Indemnified Person, settle or
compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not any Indemnified Person is a party
thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all
liability arising out of such action, claim, litigation or proceeding.
(c) Each of the Underwriters agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, officers who sign
the Registration Statement, any person controlling (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company, to
the same extent as the foregoing indemnity from the Company and the
Subsidiaries to each of the Indemnified Persons, but only with respect to
claims and actions based on information relating to such Underwriter that
was furnished in writing by such Underwriter through the Representatives
expressly for use in the Registration Statement or the Prospectus or any
preliminary prospectus and only insofar as the information included in the
Registration Statement, the Prospectus or any preliminary prospectus was
presented therein in conformity with the information furnished by such
Underwriter as provided above. In case any action or proceeding (including
any governmental investigation) shall be brought or asserted against the
Company, any of its
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directors, any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any preliminary prospectus in
respect of which indemnity may be sought against any Underwriter pursuant
to the foregoing sentence, the Underwriter shall have the rights and
duties given to the Company (except that if the Company shall have assumed
the defense thereof, such Underwriter shall not be required to do so, but
may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and each
such controlling person shall have the rights and duties given to the
Indemnified Person by Section 9(b) above.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand, from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying parties
and the indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand, and the Underwriters, on the other hand, shall be deemed to be in
the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company, bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact related to information supplied by the
Company on the one hand or by the Underwriters on the other, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The indemnity and
contribution obligations set forth herein of any party shall be in
addition to any liability or obligation such party may otherwise have to
the other.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by
pro rata allocation (even if the Underwriters were created as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
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investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter (and its related Indemnified
Persons) shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the total underwriting discount applicable
to the Shares purchased by such Underwriter exceeds the amount of any
damages which such Underwriter (and its related Indemnified Persons) has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters obligations to contribute
pursuant to this Section 9(d) are several in proportion to the respective
aggregate price to the public of Shares purchased by each of the
Underwriters hereunder and not joint.
10. CONDITIONS TO UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase the Firm Shares under this Agreement are
subject to the satisfaction of each of the following Conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date. All
agreements of the Company set forth in Sections 6(a) through (g), Sections
6(i), 6(l) and 6(m), and the last paragraph of Section 3 of this Agreement
that are required to be performed or complied with by the Company at or
prior to the Closing Date shall have been performed or complied with by
the Company at or prior to the Closing Date. The Company shall have
performed or complied in all material respects with all of its agreements
herein contained (other than those referenced in the immediately preceding
Sentence) and required to be performed or complied with by it at or prior
to the Closing Date.
(b) (i) The Registration Statement shall be effective on the date
hereof, or if a post-effective amendment is required to be filed under the
Act, such post-effective amendment shall have become effective (or, if a
post-effective amendment is required to be filed pursuant to Rule 430A
under the Act, such post-effective amendment shall have become effective)
not later than 5:00 p.m., New York City time, on the date of this
Agreement or at such later date and time as you may approve in writing
and, at the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for
that purpose shall have been commenced or shall be pending before or
threatened by the Commission, (ii) every request for additional
information on the part of the Commission shall have been complied with in
all material respects, and (iii) no stop order suspending the sale of the
Shares in any jurisdiction referred to in Section 6(g) shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened which would, in your reasonable judgment,
make it impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares.
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(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
Material Adverse Change, whether or not arising in the ordinary course of
business, (ii) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the capital stock or long-term debt, or any
material increase in short-term debt, of the Company or any of its
Subsidiaries and (iii) the Company and its Subsidiaries shall have no
liability or obligation, direct or contingent, that is material to the
Company and its Subsidiaries taken as a whole and is required to be
disclosed in the notes to its financial statements in accordance with GAAP
and which is not so disclosed in or incorporated by reference into the
Registration statement.
(d) You shall have received a certificate of the Company, dated the
Closing Date, executed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the Company, in their
capacities as officers of the Company confirming the matters set forth in
paragraphs (a), (b) and (c) of this Section 10.
(e) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of McGlinchey Stafford, a Professional
Limited Liability Company, counsel for the Company, to the effect that:
(i) (A) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and (B) has the corporate power and
authority to own and lease its properties and to conduct its business as
described in the Prospectus;
(ii) the Company has the corporate power and authority to
enter into and perform this Agreement and to issue, sell and deliver the
Shares; this Agreement has been duly and validly authorized by all
necessary corporate action by the Company, and have been duly executed and
delivered by the Company;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the "Description
of Capital Stock" section of the Registration Statement and the
Prospectus;
(iv) the Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
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(vi) neither the issuance and sale of the Shares, nor the
performance of the Company's obligations pursuant to this Agreement will
(A) conflict with, result in a breach of, or constitute a default under
the terms of any Louisiana statute, rule or regulation to which the
Company or any of its properties is subject Company or (B) violate any of
the provisions of the charter or by-laws of the Company as in effect on
the date of the opinion;
(vii) the articles of incorporation and bylaws of the Company
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus and the provisions of Louisiana law described
in the Registration Statement and the Prospectus conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(f) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of Baker & McKenzie and Brons & Salas,
Venezuelan and Argentine counsel for the Company, respectively, to the
effect that:
(i) Each of Pride International, C.A., Perforaciones
Quitral-Co de Venezuela, S.A. and Pride International, S.A. (the "SOUTH
AMERICAN SUBSIDIARIES") (A) has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and (B) has the corporate power and
authority to own and lease its properties and to conduct its business as
described in the Prospectus;
(ii) each of the South American Subsidiaries is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect;
(iii) all of the issued and outstanding capital stock of each
of the South American Subsidiaries has been duly authorized and validly
issued, and is fully paid and nonassessable, and except as disclosed in
the Prospectus, the shares of capital stock of each South American
Subsidiary are owned directly or indirectly by the Company free and clear
of any perfected security interest and, to such counsel's knowledge, any
other security interests, claims, liens or encumbrances; and
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus or in this Agreement, there are no outstanding (a) securities
or obligations of the any of the South American Subsidiaries convertible
into or exchangeable for any capital stock of any such Subsidiary, (b)
warrants, rights or options to subscribe for or purchase from any such
Subsidiary any such capital stock or any such convertible or exchangeable
securities or obligations, or (c) obligations of any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
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(g) You shall have received the written opinion of Jean-Marc
Laveissiere, General Counsel and Secretary of Forasol S.A., addressed to
the Underwriters and dated the Closing Date to the effect that:
(i) each of Forasol S.A., Foramer S.A. and Forinter Ltd. (the
"FORASOL SUBSIDIARIES") has been duly incorporated and is validly existing
as a corporation under the laws of France, with full corporate power and
authority to own its properties and to conduct its business as described
in the Registration Statement and the Prospectus;
(ii) each of the Forasol Subsidiaries is duly qualified and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(iii) all of the issued and outstanding capital stock of each
of the Forasol Subsidiaries has been duly authorized and validly issued,
and is fully paid and nonassessable, and except as disclosed in the
Prospectus and such minimum minority interests as may be required by
applicable French law, the shares of capital stock of each Forasol
Subsidiary are owned directly or indirectly by the Company free and clear
of any perfected security interest and, to such counsel's knowledge, any
other security interests, claims, liens or encumbrances.
(h) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of Baker & Botts, L.L.P., counsel for
the Company, to the effect that:
(i) to such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for
any capital stock of the Company or any such subsidiary, (b) warrants,
rights or options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such convertible or
exchangeable Securities or obligations, or (c) obligations of the Company
or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable Securities or obligations, or any such
warrants, rights or options;
(ii) This Agreement (assuming the due authorization, execution
and delivery hereof by the Company and the valid authorization, execution
and delivery by the Underwriters) is a valid and binding agreement of the
Company enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by applicable law)
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws then or thereafter in effect
relating to or affecting rights and remedies of creditors, and to general
principles of equity (regardless of
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whether enforcement is sought in a proceeding at law or in equity) and to
the discretion of the court before which any proceeding therefor may be
brought;
(iii) the Registration Statement has become effective under
the Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and to the knowledge of such
counsel no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings therefor initiated or
threatened by the Commission;
(iv) each document previously filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus, at the time it was
filed or last amended (except for financial statements, the notes thereto
and related schedules and other financial, numerical, statistical or
accounting data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opinion), appeared on
its face to comply as to form in all material respects to the applicable
requirements of the Exchange Act.
(v) to the knowledge of such counsel, no authorization,
approval, consent or order of any court or United States Federal or State,
governmental authority or agency is required to be obtained by the Company
in connection with the sale by the Company of the Shares to you, except
(a) such as have been obtained under the Act, and (b) such as may be
required by one NASD or under the state securities or Blue Sky laws or
regulations of any jurisdiction in the United States in connection with
the purchase and distribution of the Shares by the Underwriters
(vi) the respective provisions of the Shares and the Indenture
described in the Registration Statement and the Prospectus conform in all
material respects to the respective descriptions thereof contained in the
Registration statement and the Prospectus;
(vii) the Registration Statement, at the time it became
effective, and the Prospectus, on its issue date and on the Closing Date
(except, in each case, for financial statements, the notes thereto, the
auditors' report thereon and related schedules and other financial,
numerical, statistical or accounting data included or incorporated by
reference therein or omitted therefrom, as to which no opinion need be
expressed), appeared on their face to comply as to form in all material
respects with the applicable requirements of the Act; to the knowledge of
such counsel, there are no contracts or agreements to which the Company or
any Subsidiary is a party or by which any of them may be bound that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement other than those
described therein or filed or incorporated by reference as exhibits
thereto;
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(viii) neither the issuance and sale of the Shares, nor the
performance of the Company's obligations pursuant to this Agreement will
conflict with, result in a breach of, or constitute a default under (A)
the terms of any indenture or other agreement or instruments and to which
the Company or any subsidiary is a party or bound which is material to the
Company and its Subsidiaries considered as a whole and of which such
counsel has knowledge, (B) any statute, rule or regulation to which the
Company or any Subsidiary is a party or by which any of them is bound, or
to which any of the properties of the Company or any Subsidiary is
subject, or (C) any order of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary or any of their
properties of which such counsel has knowledge;
(ix) to the knowledge of such counsel, there is no current,
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary or to which any of their respective property is
subject of a character required to be disclosed in the Registration
Statement which is not disclosed in the Prospectus;
(x) the Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(xi) to the knowledge of such counsel, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company as part of or under the
Registration statement;
(i) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing, of Robert W. Randall, General Counsel of the
Company, to the effect that:
(i) each of the Subsidiaries that has been organized under the
laws of a state of the United States (the "U.S. SUBSIDIARIES") has been
duly organized and is validly existing as corporations in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power and authority to own and lease its properties and to conduct its
business as described in the Prospectus;
(ii) the Company and each of the U. S. Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a Material Adverse
Effect;
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(iii) all of the issued and outstanding capital stock of each
of the U. S. Subsidiaries has been duly authorized and validly issued, and
is fully paid and nonassessable, and except as disclosed in the
Prospectus, the shares of capital stock of each U.S. Subsidiary are owned
directly or indirectly by the Company free and clear of any perfected
security interest and, to such counsel's knowledge, any other security
interests, claims, liens or encumbrances;
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for
any capital stock of the Company or any such subsidiary, (b) warrants,
rights or options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such convertible or
exchangeable Securities or obligations, or (c) obligations of the Company
or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable Securities or obligations, or any such
warrants, rights or options;
(v) neither the issuance and sale of the Shares, nor the
performance of the Company's obligations pursuant to this Agreement will
violate any of the provisions of the charter or by-laws of the Company or
any U.S. Subsidiary as in effect on the date of the opinion;
(vi) to the knowledge of such counsel, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company as part of or under the
Registration Statement;
(vii) to the knowledge of such counsel, there is no current,
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary or to which any of their respective property is
subject of a character required to be disclosed in the Registration
Statement which is not disclosed in the Prospectus;
(viii)except as will not have a Material Adverse Effect, to
the knowledge of such counsel, each of the Company and its Subsidiaries
has such Permits as are in all material respects, necessary to own, lease
and operate their respective properties and to conduct their respective
businesses in the manner described in the Prospectus; to the knowledge of
such counsel, each of the Company and its Subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit, subject in each
case to such qualification as may be set forth in the Prospectus;
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<PAGE>
(ix) to the knowledge of such counsel, neither the issuance
and sale of the Shares, nor the performance of the Company's obligations
pursuant to this Agreement will (A) conflict with, result in a breach of,
or constitute a default under the terms of any material indenture or other
material agreement or instrument to which any Subsidiary is a party or
bound, or constitute a default under, any statutes rule or regulation to
which any Subsidiary is a party or by which any of them is bound, or to
which any of the properties of any non-U.S. Subsidiary is subject, or any
order of any court or governmental agency or body having jurisdiction over
any non-U.S. Subsidiary or any of their properties, except as will not
have a Material Adverse Effect, or (B) violate any of the provisions of
the charter or by-laws of any non-U.S. Subsidiary as in effect on the date
of the opinion; and
(x) the respective provisions of the employment agreements and
the Pride Petroleum Services, Inc. Long-Term Incentive Plan described in
the Company's proxy statement incorporated by reference into the
Prospectus conform in all material respects to the respective descriptions
thereof contained in such proxy statement.
In addition, each of Baker & Botts, L.L.P. and Robert W. Randall
shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, your representatives and
your counsel at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel
did not independently verify such information and is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing (relying as to the factual
matters upon the statements of officers and other representatives of the
Company and state officials and as to materiality to a large degree on
officers and other representatives of the Company and your
representatives) no facts came to such counsel's attention that led such
counsel to believe that the Registration Statement (other than the
financial statements, the notes thereto and the auditors' report thereon
and other financial, numerical, statistical and accounting data included
or incorporated by reference therein, or omitted therefrom, as to which
such counsel need express no belief) as amended or supplemented, at the
time such Registration Statement or any post-effective amendment became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or the Prospectus (other than the
financial statements and notes thereto and other financial, numerical,
statistical and accounting data included or incorporated by reference
therein, or omitted therefrom, as to which such counsel need express no
belief) as amended or supplemented, as of its date and the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
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The opinion of McGlinchey Stafford shall be limited to the laws of
the State of Louisiana. The opinion of Baker & Botts, L.L.P. shall be
limited to the laws of the United States and the laws of the State of New
York and the State of Texas. The opinion of Robert W. Randall shall be
limited to the laws of the United States, the laws of the State of Texas,
and the corporate law of the State of Delaware. The opinion of each
foreign counsel shall be limited to the laws of the jurisdiction in which
the Foreign Subsidiary with respect to which such opinion is given is
organized.
(j) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Vinson & Elkins L.L.P., counsel for the Underwriters,
in form and substance reasonably satisfactory to you.
(k) You shall have received letters on and as of the date hereof as
well as on and as of the Closing Date (in the latter case constituting an
affirmation of the statements set forth in the former, based on limited
procedures), in form and substance satisfactory to you, from Coopers &
Lybrand L.L.P., and Ernst & Young, L.L.P., independent public accountants
and any other independent public accountants deemed necessary by counsel
for the Underwriters, with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(l) The Company shall have delivered to you the agreements specified
in Section 3 hereof.
(m) Prior to the Closing Date, the Company shall have furnished to
you or caused to be furnished to you such further information,
certificates and documents as you may reasonably request.
(n) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to
the Closing Date.
(o) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 436(g) under the Act, nor shall any such organization have advised
the Company or the Underwriters, that (i) it is downgrading its rating
assigned to any class of securities of the Company or (ii) it is reviewing
any such rating with a view to possible downgrading, or with negative
implications, or direction not determined.
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and
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issuance of such Additional Shares and other matters related to the issuance of
such Additional Shares.
11. DEFAULTS AND TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date by you by written notice to the Company if any of the
following has occurred: (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material adverse
change or development involving a prospective material adverse change in the
condition, financial or otherwise, of the Company and its subsidiaries, taken as
a whole, or the earnings, affairs, or business prospects of the Company or any
of its subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, which would, in your judgment, make it impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus,
(iii) the suspension or material limitation of trading in securities on the New
York Stock Exchange, the American Stock Exchange or the NASDAQ National Market
System or limitation on prices for securities on any such exchange or National
Market System, (iv) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company or any Subsidiary, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
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Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
Company for purchase of such Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter and the Company. In any such case which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date or the applicable Option Closing Date, as
the case may be, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of any such Underwriter under this Agreement.
The indemnity and contribution provisions and the other agreements,
representations and warranties set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any of the Underwriters or by
or on behalf of the Company or the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Shares and payment for
them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters pursuant to
clause (i) or (viii) of the second paragraph of this Section 11 as a result of
any act or omission of the Company or because of the failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, the Company agrees to reimburse you for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by you. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it agrees to pay pursuant to
Section 7 hereof.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Subsidiaries, the
Underwriters, any indemnified party referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The terms "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to it at 1500
City West Boulevard, Suite 400, Houston, Texas 77042, Attention: Robert W.
Randall, with a copy to Baker & Botts, L.L.P., at 3000 One Shell Plaza, Houston,
Texas 71002, Attention: L. Proctor Thomas, Esq., (b) if to any Underwriter, to
Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway, New York, New
York 10005,
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<PAGE>
Attention: Syndicate Department and, in each case, with a copy to Vinson &
Elkins L.L.P., 1001 Fannin, Suite 2300, Houston, Texas 77002, Attention: T. Mark
Kelly, or in any case to such other address as the person to be notified may
have requested in writing.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
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This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company and you.
Very truly yours,
PRIDE PETROLEUM SERVICES, INC.
By: /s/ EARL MCNIEL
Name: Earl McNiel
Title:Chief Financial Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
Date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ C. MITCHELL COX
Name: C. Mitchell Cox
Title:Vice President
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SCHEDULE I
FIRM SHARES
-----------
Donaldson, Lufkin & Jenrette
Securities Corporation 2,020,000
Jefferies & Company, Inc. 1,212,000
Robert W. Baird & Co. Incorporated 202,000
Morgan Keegan & Company, Inc. 202,000
Simmons & Company International 202,000
Southcoast Capital Corporation 202,000
Hanifen, Imhoff Inc. 65,000
Johnson Rice & Company L.L.C. 65,000
Principal Financial Securities, Inc. 65,000
Rauscher Pierce Refsnes, Inc. 65,000
---------
Total 4,300,000
Pride Petroleum Services, Inc.
$325,000,000 aggregate principal amount, 9 3/8% Senior Notes Due 2007
UNDERWRITING AGREEMENT
May 2, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
JEFFERIES & COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
MORGAN KEEGAN & COMPANY, INC.
SIMMONS & COMPANY INTERNATIONAL
SOUTHCOAST CAPITAL CORPORATION
As representatives (the "Representatives") of the
several underwriters
named in Schedule I hereto
140 Broadway
New York, New York 10005
Ladies and Gentlemen:
Pride Petroleum Services, Inc., a Louisiana corporation (the "COMPANY"),
confirms its agreement with the several underwriters listed in Schedule I hereto
(the "UNDERWRITERS") as follows.
1. THE SECURITIES. Subject to the terms and conditions herein set forth,
the Company proposes to issue and sell to the Underwriters $300,000,000
aggregate principal amount of its 9 3/8% Senior Notes due 2007 (the
"SECURITIES"). The Securities are to be issued under an Indenture dated as of
May 1, 1997, and as amended and supplemented by a First Supplemental Indenture
dated as of May 1, 1997, by and between the Company and Chase Manhattan Bank, as
Trustee (the "INDENTURE").
2. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3, including a base prospectus
relating to the Securities and certain other securities. The registration
statement as amended at the time
<PAGE>
when it became effective on April 4, 1997, including information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Act, is hereinafter referred to as the Registration
Statement; and the base prospectus dated April 4, 1997, as supplemented by the
prospectus supplement relating to the Securities in the form first used to
confirm sales of Securities is hereinafter referred as the Prospectus. Any
reference in this Agreement to the Registration Statement, a preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the effective date of the Registration Statement or the
date of such Preliminary Prospectus or the Prospectus.
3. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to the terms and
conditions hereof, the Company agrees to issue and sell to the Underwriters, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
the Securities in the respective principal amounts set forth opposite the name
of such Underwriter in Schedule I hereto, plus such amount as they individually
may become obligated to purchase pursuant to Section 11 hereof, at 97 5/8% of
the principal amount thereof, plus accrued interest, if any, from the date of
first issuance of any Securities (the "PURCHASE PRICE").
4. TERMS OF THE PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the effective date of the Registration Statement
as in your judgment is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
5. DELIVERY AND PAYMENT. Payment for the Securities shall be made at 10:00
A.M., New York City time, on the third business day (or fourth business day if
permitted by Rule 15c6-1(c) of the Securities Exchange Act of 1934, as amended,
including the rules and regulations thereunder (the "Exchange Act")) (such time
and date being referred to as the "CLOSING DATE") following the initial public
offering of the Securities as advised by you to the Company, at such place as
you shall designate. The Closing Date and the location of delivery of and the
form of payment for the Securities may be varied by agreement between you and
the Company.
Unless otherwise directed by you, payment of the Purchase Price shall be
made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company against delivery to you for the respective
accounts of the several Underwriters of the Securities. Unless you direct that
the Securities will be issued in book-entry form, the Securities shall be
registered in such names and issued in such denominations as you shall request
in writing not later than two full business days prior to the Closing Date and
shall be made available to you for inspection not later than 9:30 A.M., New York
City time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Securities shall be delivered to you on the
Closing Date with any transfer taxes payable upon initial issuance thereof duly
paid by the Company, for the respective accounts of the Underwriters against
payment of the Purchase Price therefor. If the Securities will be issued in
book-entry form, the Company shall deposit the global
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certificate representing the Securities with the Depository Trust Company
("DTC"), or its designated custodian at the Closing Date, and the Company will
deliver such global certificate to the several Underwriters by causing DTC to
credit the Securities to the respective accounts of the Underwriters at DTC.
6. AGREEMENTS OF THE COMPANY. The Company agrees with you that:
(a) It will, if necessary or required by law, file an amendment to
the Registration Statement or, if necessary pursuant to Rule 430A under
the Act, a post-effective amendment to the Registration Statement, as soon
as practicable after the execution and delivery of this Agreement, and
will use its best efforts to cause the Registration Statement or such
post-effective amendment to become effective at the earliest possible
time. The Company will comply fully and in a timely manner with the
applicable provisions of Rule 424 and Rule 430A under the Act.
(b) It will advise you promptly and, if requested by you, confirm
such advice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmission to the Commission for
filing of any supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the Prospectus and to
furnish you with copies thereof, (iii) of the receipt of any comments from
the Commission that relate to the Registration Statement or requests by
the Commission for amendments to the Registration Statement or amendments
or supplements to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Securities for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purpose by the Commission or
any state securities commission or other regulatory authority, and (v) of
the happening of any event during the period referred to in paragraph (e)
below which makes any statement of a material fact made in the
Registration Statement (as amended or supplemented from time to time)
untrue or which requires the making of any additions to or changes in the
Registration Statement (as amended or supplemented from time to time) in
order to make the statements therein not misleading or that makes any
statement of a material fact made in the Prospectus (as amended or
supplemented from time to time) untrue or which requires the making of any
additions to or changes in the Prospectus (as amended or supplemented from
time to time) in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of the Securities under any state securities or Blue Sky laws,
the Company shall, if reasonably requested by you, use every reasonable
effort to obtain the withdrawal or lifting of such order at the earliest
possible time.
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(c) It will furnish to the Underwriters without charge two (2)
signed copies of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits filed
therewith or incorporated by reference therein, and will furnish to you
and each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) It will not file any amendment to the Registration Statement, or
make any amendment or supplement to the Prospectus, of which you shall not
previously have been advised and provided a copy prior to the filing or
making thereof or to which you shall reasonably object; and it will
prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or any amendment or
supplement to the Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by you, and will use
its best efforts to cause the same to become effective as promptly as
possible.
(e) For such period as in the opinion of counsel for the
Underwriters a prospectus is required by the Act to be delivered in
connection with sales by an Underwriter or a dealer, it will furnish to
each Underwriter and dealer without charge as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as such
Underwriter or dealer may reasonably request for the purposes contemplated
by the Act.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
existing as of the date the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Act, it will, as promptly as practicable, prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances existing as of
the date the Prospectus is so delivered, be misleading, and so that the
Prospectus will comply with the Act, and will furnish to each Underwriter
and to such dealers as you shall specify without charge such number of
copies thereof as such Underwriter and such dealers may reasonably
request.
(g) Prior to any public offering of the Securities, it will
cooperate with you and counsel for the Underwriters in connection with the
registration or qualification of the Securities for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request (provided, that the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to take any action that
would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject). The Company will
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continue such qualification in effect so long as required by law for
distribution of the Securities and will file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification (provided, that the Company shall not be
obligated to take any action that would subject it to general consent to
service of process in any jurisdiction in which it is not now so subject).
(h) It will make generally available to its security holders as soon
as reasonably practicable a consolidated earnings statement covering a
period of at least twelve months beginning after the "effective date" (as
defined in Rule 158 under the Act) of the Registration Statement (but in
no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder
and will advise you in writing when such statement has been so made
available.
(i) During the period of five years after the date of this
Agreement, to furnish to you as soon as available a copy of each report or
other publicly available information of the Company mailed to the holders
of the Securities or of its Common Stock or filed with the Commission and
such other publicly available information concerning the Company and its
Subsidiaries as you may reasonably request.
(j) It will use the proceeds from the sale of the Securities in the
manner described in the Prospectus under the Caption "Use of Proceeds."
(k) It has not taken and will not take, directly or indirectly, any
action designed, or that might reasonably be expected, to cause or result
in stabilization or manipulation of the market price of the Securities to
facilitate the sale or resale of the Securities.
(l) It will use its best efforts to do and perform all things
required to be done and performed under this Agreement by it prior to or
after the Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Securities.
7. PAYMENT OF EXPENSES. The Company agrees with you that whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, the Company will pay and be responsible for all costs, expenses,
fees (other than, except as provided in sections 7(iii) and (v), Section 9 and
Section 11 hereof, the fees and expenses of your counsel) and taxes in
connection with (i) the preparation, printing, filing and distribution under the
Act of the Registration Statement (including financial statements and exhibits),
each Prospectus, preliminary prospectus and all amendments and supplements to
any of them, prior to or during the period specified in paragraph 6(e), (ii) the
issuance and delivery of the Securities, (iii) the registration or qualification
of the Securities for offer and sale under the Securities or Blue Sky laws of
the jurisdictions referred to in paragraph 6(g) above (including, in each case,
the reasonable fees and disbursements of counsel for the Underwriters relating
to such registration or qualification and any memoranda relating thereto), (iv)
furnishing such copies of the Registration Statement, Prospectus and preliminary
prospectus,
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and all amendments and supplements to any of them, as may be requested for use
in connection with the offering or sale of the Securities by the Underwriters or
by dealers to whom Securities may be sold, prior to or during the period
specified in paragraph 6(e), (v) filing, registration and clearance with the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the offering of the Securities (including in each case any disbursements of
counsel for the Underwriters relating thereto), (vi) the printing (including
word processing) of this Agreement, any memoranda describing state securities or
Blue Sky laws and all other agreements, memoranda, correspondence and other
documents printed, distributed and delivered in connection with the offering of
the Securities, and (vii) the performance by the Company of its other
obligations under this Agreement, the cost of its personnel and other internal
costs, including (without limitation) the fees of the Trustee, and all expenses
and taxes incident to the sale and delivery of the Securities to you.
8. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants
to each Underwriter that:
(i) The Registration Statement has become effective and at the
date of the Prospectus (if different), including at the date of any
post-effective amendment or supplement, the Registration Statement will
comply in all material respects with the provisions of the Act, and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus (and any supplements or
amendments thereto) will at all such times comply in all material respects
with the provisions of the Act and will not at any such time contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph 8(i) shall not
apply to (A) statements in or omissions from the Registration Statement or
the Prospectus (or any supplement or amendment to any of them) based upon
and conforming with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein or (B) the Form T-1. The Company
acknowledges for all purposes under this Agreement (including this
paragraph and Section 9 hereof) that the statements set forth in the first
(including the table), second and final paragraphs of the section entitled
"Underwriting" in the Prospectus constitute the only written information
furnished to the Company by or on behalf of the Underwriters for use in
the Registration Statement or the Prospectus or any preliminary prospectus
(or any amendment or supplement to any of them) and that the Underwriters
shall not be deemed to have provided any information (and therefore are
not responsible for any statements or omissions) pertaining to any
arrangement or agreement with respect to any party other than the
Underwriters. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is not described and filed as
required.
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(ii) The documents incorporated by reference in the
Registration Statement and the Prospectus pursuant to Item 12 of Form S-3
under the Act, at the time they became effective or at the time they were
filed with the Commission, or to the extent such documents were
subsequently amended prior to the date hereof, at the time so amended
complied in all material respects with the requirements of the Exchange
Act and, when read together and with the other information in the
Prospectus do not and will not on the date hereof and at the Closing Date
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are
made, not misleading.
(iii) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 or 430A under the Act, complied
when so filed in all material respects with the provisions of the Act and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(iv) Each "significant subsidiary" (as such term is defined in
Regulation S-X under the Exchange Act) of the Company is listed on Exhibit
21 to the Annual Report on Form 10-K of the Company for the year ended
December 31, 1996 or is described in the Registration Statement as having
been acquired after December 31, 1996. The Company and each of its
subsidiaries listed on Schedule II hereto (the "SUBSIDIARIES") has been
duly organized, is validly existing and in good standing under the laws of
its jurisdiction of organization and has full corporate power and
authority to carry on its business as it is currently being conducted
(and, in the case of the Company, to authorize the offering of the
Securities and to issue, sell and deliver the Securities), and is duly
qualified and is in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a Material Adverse
Effect (as defined below).
(v) All of the issued and outstanding shares of capital stock
of each of the Subsidiaries has been duly authorized and validly issued
and are owned directly or indirectly by the Company, subject to such
minimum minority ownership interests in the non-U.S. Subsidiaries as may
be required under applicable law. All such shares are fully paid and
nonassessable, and, except as disclosed in the Prospectus, are owned by
the Company free and clear of any security interest, mortgage, pledge,
claim, lien, encumbrance or adverse interest of any nature (each, a
"LIEN"). There are no outstanding subscriptions, rights, warrants,
options, calls, convertible or exchangeable securities, commitments of
sale, or Liens related to or entitling any person to purchase or otherwise
to acquire any shares of the capital stock of, or other ownership
interests in, any Subsidiary.
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(vi) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"; all
the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable and not
subject to any preemptive or similar rights; except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company convertible into or exchangeable for any capital stock of the
Company, (b) warrants, rights or options to subscribe for or purchase from
the Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (c) obligations of the Company to issue any
shares of capital stock, any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options; all offers and
sales of the Company's capital stock by the Company prior to the date
hereof were at all relevant times duly registered under the Act or exempt
from the registration requirements of the Act and were duly registered or
the subject of an available exemption from the registration requirements
of the applicable state securities or Blue Sky laws; and the capital stock
of the Company, including the Common Stock, conforms in all material
respects to all statements relating thereto in the Prospectus and the
Registration Statement;
(vii) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and has been duly authorized by all
necessary corporate action on the part of the Company and, when executed
and delivered by the Company in accordance with its terms (assuming the
due execution and delivery thereof by the Trustee), will be a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought at law or in equity).
(viii) The Securities have been duly authorized by all
necessary corporate action on the part of the Company and on the Closing
Date, the Indenture and the Securities will have been duly executed by the
Company and will conform in all material respects to the descriptions
thereof in the Prospectus. When the Securities are issued, executed and
authenticated in accordance with the Indenture and paid for in accordance
with the terms of this Agreement, the Securities will be legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws, now or hereafter in effect,
relating to or affecting creditors' rights and remedies generally
(regardless of whether enforcement is sought at law or in equity).
(ix) Neither the Company nor any Subsidiary is in violation of
or in default under (a) its charter or bylaws or (b) any bond, debenture,
note or any other evidence of indebtedness or any indenture, mortgage,
deed of trust or other contract, lease or other
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<PAGE>
instrument to which it is a party or by which it is bound, or to which any
of its property or assets is subject, which could reasonably be expected
to have a material adverse effect, singly or in the aggregate, on the
business, results of operations, financial condition or business affairs,
of the Company and the Subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"). No contract or other document of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is not so described or filed
as required.
(x) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms (except as rights to indemnity and contribution
hereunder may be limited by federal or state Securities laws or public
policy relating thereto).
(xi) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Securities, the
performance of this Agreement and the Indenture and the consummation of
the transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except for such
consents as have been obtained and except as such may be required under
the securities or Blue Sky laws of the various states) and will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default or cause an acceleration of any obligation under,
(A) the charter or bylaws of the Company or any Subsidiary, (B) any bond,
note, debenture or other evidence of indebtedness or any indenture,
mortgage, deed of trust or other contract, lease or other instrument to
which the Company or any Subsidiary is a party or by which any of them is
bound, or to which any of the property or assets of the Company or any
Subsidiary is subject, which could reasonably be expected to have a
Material Adverse Effect, (C) any order of any court or governmental agency
or authority entered in any proceeding to which the Company or any
Subsidiary is a party or by which any of them is bound, or (D) violate or
conflict with any applicable foreign, Federal, state or local law, rule,
administrative regulation or ordinance or administrative or court decree
applicable to the Company or any Subsidiary or any of their respective
property.
(xii) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental agency
or body pending against the Company or any of its Subsidiaries that is
required to be disclosed in the Registration Statement or the Prospectus,
or which could reasonably be expected to have a Material Adverse Effect,
or materially and adversely affect the performance of the Company's
obligations pursuant to this Agreement and, to the best of the Company's
knowledge, no such proceedings are contemplated or threatened. No action
has been taken with respect to the Company or any Subsidiary, and no
statute, rule or regulation or order has been enacted, adopted or issued
by any governmental agency and no injunction, restraining order or other
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order of any court of competent jurisdiction has been issued with respect
to the Company or any Subsidiary that prevents the issuance of the
Securities, suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any preliminary prospectus or the
Prospectus, or any amendment or supplement thereto, or prevents or
suspends the sale of the Securities in any of the jurisdictions that you
may have specified pursuant to Section 6(g) hereof; no action, suit or
proceeding before any court or arbitrator or any governmental body, agency
or official (domestic or foreign), is pending against or, to the knowledge
of the Company, threatened against, the Company or any Subsidiary that, if
adversely determined, could reasonably be expected to (a) interfere with
or adversely affect the issuance of the Securities or (b) in any manner
invalidate this Agreement or the Indenture; and every request of the
Commission, or any securities authority or agency of any jurisdiction, for
additional information to be included in the Registration Statement or the
Prospectus or otherwise has been complied with in all material respects.
(xiii) Coopers & Lybrand L.L.P., the firm of accountants that
has certified the applicable consolidated financial statements and
supporting schedules of the Company filed with the Commission as part of
or incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the Company
and the Subsidiaries, as required by the Act. Ernst & Young Audit, Price
Waterhouse and Pistrelli, Diaz & Associados are independent public
accountants with respect to certain Subsidiaries of the Company. The
consolidated financial statements, together with related schedules and
notes, set forth or incorporated by reference in the Prospectus and the
Registration Statement comply as to form in all material respects with the
requirements of the Act. Such financial statements fairly present in all
material respects the consolidated financial position of the Company and
the Subsidiaries at the respective dates indicated and the results of
their operations and their cash flows for the respective periods
indicated, and have been prepared in accordance with generally accepted
accounting principles ("GAAP"), except as otherwise expressly stated
therein, as consistently applied throughout such periods. The other
financial and statistical information and data included or incorporated by
reference in the Prospectus and in the Registration Statement, historical
and PRO FORMA, are, in all material respects, accurate and prepared on a
basis consistent with such financial statements and the books and records
of the Company. Each of the Company and its Subsidiaries keeps books and
records that fairly reflect its assets and maintains internal accounting
controls which provide reasonable assurance that (a) transactions are
executed in accordance with management's authorization, (b) transactions
are recorded as necessary to permit preparation of the Company's
consolidated financial statements in accordance with generally accepted
accounting principles and to maintain accountability for the assets of the
Company, (c) access to the assets of the Company and each of its
Subsidiaries is permitted only in accordance with management's
authorization, and (d) the recorded accountability for assets of the
Company and each of its Subsidiaries is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences.
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(xiv) Except as disclosed in the Registration Statement,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any
Subsidiary has incurred any liabilities or obligations, direct or
contingent, that are material to the Company and the Subsidiaries, taken
as a whole, nor entered into any transaction not in the ordinary course of
business that is material to the Company and the Subsidiaries, taken as a
whole, and is required to be disclosed on a balance sheet in accordance
with GAAP, either when considered alone or together with all other such
transactions, (ii) there has been no decision or judgment in the nature of
litigation adverse to the Company or any Subsidiary that could reasonably
be expected to have a Material Adverse Effect, and (iii) there has been no
material adverse change in the financial condition or in the results of
operations, business affairs or business prospects of the Company and the
Subsidiaries, taken as a whole (any of the above, a "MATERIAL ADVERSE
CHANGE").
(xv) The Company and each of its Subsidiaries has such
certificates, permits, licenses, approvals, authorizations and other
rights (collectively, "PERMITS") including, without limitation, under any
Environmental Laws (defined below), issued by governmental or regulatory
authorities as are, in all material respects, necessary to own, lease and
operate their respective properties and to conduct their respective
businesses; the Company and each of its Subsidiaries has fulfilled and
performed all of its material obligations with respect to such Permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results or would result in any
other material impairment of the rights of the holder of any such Permit;
and, except as described in the Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company and its
Subsidiaries considered as a whole.
(xvi) All material tax returns required to be filed by the
Company and the Subsidiaries in every jurisdiction have been filed, other
than those filings being contested in good faith, and, except as disclosed
in the Prospectus, all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from such entities have been paid.
(xvii) Except as would not, individually or in the aggregate,
have a Material Adverse Effect (a) neither the Company nor any Subsidiary
is in violation of any foreign, Federal, state or local laws and
regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of toxic or hazardous substances,
materials or wastes, or petroleum and petroleum products ("MATERIALS OF
ENVIRONMENTAL CONCERN"), or otherwise relating to the storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"ENVIRONMENTAL LAWS"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations;
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(b) neither the Company nor any Subsidiary has received any communication
(written or oral), whether from a governmental authority or otherwise,
alleging any such violation or noncompliance, and there are no
circumstances, either past, present or that are reasonably foreseeable,
that may lead to such violation in the future; (c) there is no pending or
threatened claim, action, investigation or notice (written or oral) by any
person or entity alleging potential liability for investigatory, cleanup,
or governmental responses costs, or natural resources or property damages,
or personal injuries, attorney's fees or penalties relating to (x) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location owned or operated by the Company or
any Subsidiary, now or in the past, or (y) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law
(collectively, "ENVIRONMENTAL CLAIMS"); and (d) there are no past or
present actions, activities, circumstances, conditions, events or
incidents, that could form the basis of any Environmental Claim against
the Company or any Subsidiary or against any person or entity whose
liability for any Environmental Claim the Company or any Subsidiary has
retained or assumed either contractually or by operation of law.
(xviii) Except as would not have a Material Adverse Effect,
(A) neither the Company nor any Subsidiary is in material violation of any
Federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable wage or hour laws nor any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder, (B) there is
no unfair labor practice complaint pending against the Company or any
Subsidiary or, to the best knowledge of the Company, threatened against
any of them, before the National Labor Relations Board or any state or
local labor relations board, and (C) there is no labor dispute in which
the Company or any Subsidiary is involved nor, to the best knowledge of
the Company, is any labor dispute imminent, other than routine
disciplinary and grievance matters.
(xix) Except as otherwise set forth in the Prospectus or such
as would not have a Material Adverse Effect, the Company and each
Subsidiary has good and marketable title, free and clear of all Liens
(except Liens for taxes not yet due and payable), to all prop erty and
assets described in the Registration Statement as being owned by it. All
leases to which the Company or any Subsidiary is a party are valid and
binding and no default has occurred or is continuing thereunder, which
might result in a Material Adverse Effect, and the Company and each
Subsidiary enjoy peaceful and undisturbed possession under all such leases
to which any of them is a party as lessee with such exceptions as do not
materially interfere with the use made by the Company or such Subsidiary.
(xx) The Company and its Subsidiaries maintain what they
believe to be reasonably adequate insurance coverage for those risks that
the Company believes to be customarily insured against by companies in the
same business.
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(xxi) Except for the Registration Rights Agreement between the
Company and Ackermans & van Haaran Group and Soletanche Group, no holder
of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company. No holder of
any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company as part of or
under the Registration Statement.
(xxii) Neither the Company nor any Subsidiary is a party to
any agreement that currently prohibits, directly or indirectly, any
Subsidiary from paying any dividends to the Company, from making any other
distributions on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary or from transferring any
of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company, except as disclosed in the Prospectus.
(xxiii) The Company and the Subsidiaries own or possess the
right to use all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as being
owned by them or any of them or necessary for the conduct of their
respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the right of the Company
and the Subsidiaries with respect to the foregoing.
(xxiv) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xxv) The conditions for use of a Registration Statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respects to the Company and the transactions contemplated
by this Agreement and the Registration Statement.
(xxvi) To the knowledge of the Company after inquiry of its
executive officers and directors, there are no direct or indirect
associations or affiliations with any member of the NASD among the
Company's executive officers, directors or principal stockholders, except
as set forth in the Registration Statement or as otherwise disclosed to
the Underwriters.
(xxvii) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
9. INDEMNIFICATION.
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(a) The Company agrees to indemnify and hold harmless, (i) each of
the Underwriters and (ii) each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) any of
the Underwriters (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "CONTROLLING PERSON") (any person referred to
in clause (i) or (ii) may hereinafter be referred to as an "INDEMNIFIED
PERSON") to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, actions and expenses (including
without limitation and as incurred, reimbursement of all reasonable costs
of investigating, preparing, pursuing, or defending any claim or action,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of
counsel employed by any Indemnified Person in accordance with the
provisions of this Section 9) directly or indirectly caused by, related
to, based upon or arising out of, or in connection with any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (including, in each case, any
amendment or supplement thereto) or any preliminary prospectus, or any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were
made) not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any Underwriter furnished in
writing to the Company through the Representatives by or on behalf of any
such Underwriter expressly for use therein; PROVIDED that the foregoing
indemnity with respect to any preliminary prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities, actions or expenses purchased
Securities, or any controlling person of such Underwriter, if a copy of
the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) had not been sent or
given by or on behalf of such Underwriter to such person at or prior to
the written confirmation of the sale of Securities to such person by such
Underwriter and the untrue statement or omission (or alleged untrue
statement or omission) of a material fact in such preliminary prospectus
was corrected in the Prospectus (as amended or supplemented).
(b) In case any action or proceeding (including any governmental
investigation) shall be brought or asserted against any of the Indemnified
Persons with respect to which indemnity may be sought against the Company,
such Underwriter (or the Underwriter controlled by such controlling
person) shall promptly notify the Company in writing (provided, that the
failure to give such notice shall not relieve the Company of any liability
which it may have pursuant to this Agreement, unless and only to the
extent that such omission results in the loss or compromise of any
material rights or defenses by the Company). Upon receiving such notice,
the Company shall be entitled to participate in any such action or
proceeding and to assume, at its sole expense, the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person and, after
written notice from the Company to such Indemnified Person of its election
so to assume the defense thereof, the
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Company shall not be liable to such Indemnified Person hereunder for legal
expenses of other counsel subsequently incurred by such Indemnified Person
in connection with the defense thereof, other than reasonable costs of
investigation unless (i) the Company agrees in writing to pay such fees
and expenses, or (ii) the Company fails promptly to assume such defense or
fails to employ counsel reasonably satisfactory to such Indemnified Person
or (iii) the named parties to any such action or proceeding (including any
impleaded parties) include both such Indemnified Person and the Company or
an affiliate of the Company, and such Indemnified Person shall have been
advised by counsel either (x) that there may be one or more legal defenses
available to such Indemnified Person that are different from or additional
to those available to the Company or such affiliate or (y) a conflict may
exist between such Indemnified Person and the Company or such affiliate
(in which case, if such Indemnified Person notifies the Company in
writing, the Company shall not have the right to assume the defense
thereof), it being understood, however, that the Company shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition
to any local counsel) at any time for each such Indemnified Person. The
Company shall be liable for any settlement of any such action or
proceeding effected with the prior written consent of the Company, which
consent will not be unreasonably withheld, and the Company agrees to
indemnify and hold harmless any Indemnified Person from and against any
loss, claim, damage, liability or expense by reason of any such
settlement. Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are at the expense of the
indemnifying party and an Indemnified Person shall have requested the
indemnifying party to reimburse the Indemnified Person for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its
written consent if (i) such settlement is entered into more than 30 days
after the receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall have failed to reimburse the
Indemnified Person in accordance with such request for reimbursement (or,
if within 30 days of the receipt of the aforesaid request) the
indemnifying party shall have made a good faith written challenge to the
reasonableness of the amount or nature of the reimbursement requested or
the sufficiency of the documentation supporting the reimbursement
requested (which challenge shall specifically set forth the amount or
nature of the requested reimbursement which the indemnifying party in good
faith believes to be unreasonable or the basis for the good faith claim as
to the insufficiency of any supporting documentation), in which event this
clause (ii) shall apply if such indemnifying party shall not have
reimbursed the indemnified party for the amount which is not being so
challenged) prior to the date of such settlement. The Company shall not,
without the prior written consent of each Indemnified Person, settle or
compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or
proceeding in respect of which indem nification or contribution may be
sought hereunder (whether or not any Indemnified Person is a party
thereto), unless such settlement, compromise, consent or termination
includes an
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unconditional release of each Indemnified Person from all liability
arising out of such action, claim, litigation or proceeding.
(c) Each of the Underwriters agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, officers who sign
the Registration Statement, any person controlling (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company, to
the same extent as the foregoing indemnity from the Company and the
Subsidiaries to each of the Indemnified Persons, but only with respect to
claims and actions based on information relating to such Underwriter that
was furnished in writing by such Underwriter through the Representatives
expressly for use in the Registration Statement or the Prospectus or any
preliminary prospectus and only insofar as the information included in the
Registration Statement, the Prospectus or any preliminary prospectus was
presented therein in conformity with the information furnished by such
Underwriter as provided above. In case any action or proceeding (including
any governmental investigation) shall be brought or asserted against the
Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the Prospectus or any
preliminary prospectus in respect of which indemnity may be sought against
any Underwriter pursuant to the foregoing sentence, the Underwriter shall
have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Underwriter shall not
be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company, its
directors, any such officers and each such controlling person shall have
the rights and duties given to the Indemnified Person by Section 9(b)
above.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand, from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnifying parties and the indemnified party, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company, bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue
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statement of a material fact or the omission or alleged omission to state
a material fact related to information supplied by the Company on the one
hand or by the Underwriters on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The indemnity and contribution
obligations set forth herein of any party shall be in addition to any
liability or obligation such party may otherwise have to the other.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by
pro rata allocation (even if the Underwriters were created as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter (and its related Indemnified
Persons) shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the total underwriting discount applicable
to the Securities purchased by such Underwriter exceeds the amount of any
damages which such Underwriter (and its related Indemnified Persons) has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters obligations to contribute
pursuant to this Section 9(d) are several in proportion to the respective
aggregate price to the public of Securities purchased by each of the
Underwriters hereunder and not joint.
10. CONDITIONS TO UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase the Securities under this Agreement are subject
to the satisfaction of each of the following Conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date. All
agreements of the Company set forth in Sections 6(a) through (g), Sections
6(k) and 6(l) of this Agreement that are required to be performed or
complied with by the Company at or prior to the Closing Date shall have
been performed or complied with by the Company at or prior to the Closing
Date. The Company shall have performed or complied in all material
respects with all of its agreements herein contained (other than those
referenced in the immediately preceding Sentence) and required to be
performed or complied with by it at or prior to the Closing Date.
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(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or threatened
by the Commission, (ii) every request for additional information on the
part of the Commission shall have been complied with in all material
respects, and (iii) no stop order suspending the sale of the Securities in
any jurisdiction referred to in Section 6(g) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending
or threatened which would, in your reasonable judgment, make it
impracticable or inadvisable to market the Securities or to enforce
contracts for the sale of the Securities.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
Material Adverse Change, whether or not arising in the ordinary course of
business, (ii) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the capital stock or long-term debt, or any
material increase in short-term debt, of the Company or any of its
Subsidiaries and (iii) the Company and its Subsidiaries shall have no
liability or obligation, direct or contingent, that is material to the
Company and its Subsidiaries taken as a whole and is required to be
disclosed in the notes to its financial statements in accordance with GAAP
and which is not so disclosed in or incorporated by reference into the
Registration statement.
(d) You shall have received a certificate of the Company, dated the
Closing Date, executed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the Company, in their
capacities as officers of the Company confirming the matters set forth in
paragraphs (a), (b) and (c) of this Section 10.
(e) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of McGlinchey Stafford, a Professional
Limited Liability Company, counsel for the Company, to the effect that:
(i) (A) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and (B) has the corporate power and
authority to own and lease its properties and to conduct its business as
described in the Prospectus;
(ii) the Company has the corporate power and authority to
enter into and perform this Agreement and the Indenture and to issue, sell
and deliver the Securities; this Agreement and the Indenture have been
duly and validly authorized by all necessary corporate action by the
Company, and have been duly executed and delivered by the Company;
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(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the "Description
of Capital Stock" section of the Registration Statement and the
Prospectus;
(iv) the Securities have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) neither the issuance and sale of the Securities, nor the
performance of the Company's obligations pursuant to this Agreement or the
Indenture will (A) conflict with, result in a breach of, or constitute a
default under the terms of any Louisiana statute, rule or regulation to
which the Company or any of its properties is subject Company or (B)
violate any of the provisions of the charter or by-laws of the Company as
in effect on the date of the opinion;
(vii) the articles of incorporation and bylaws of the Company
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus and the provisions of Louisiana law described
in the Registration Statement and the Prospectus conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(f) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of Baker & McKenzie and Brons & Salas,
Venezuelan and Argentine counsel for the Company, respectively, to the
effect that:
(i) Each of Pride International, C.A., Perforaciones
Quitral-Co de Venezuela, S.A. and Pride International, S.A. (the "SOUTH
AMERICAN SUBSIDIARIES") (A) has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and (B) has the corporate power and
authority to own and lease its properties and to conduct its business as
described in the Prospectus;
(ii) Each of the South American Subsidiaries is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect;
(iii) all of the issued and outstanding capital stock of each
of the South American Subsidiaries has been duly authorized and validly
issued, and is fully paid and nonassessable, and except as disclosed in
the Prospectus, the shares of capital stock of each South American
Subsidiary are owned directly or indirectly by the Company free and clear
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of any perfected security interest and, to such counsel's knowledge, any
other security interests, claims, liens or encumbrances; and
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus or in this Agreement, there are no outstanding (a) securities
or obligations of the any of the South American Subsidiaries convertible
into or exchangeable for any capital stock of any such Subsidiary, (b)
warrants, rights or options to subscribe for or purchase from any such
Subsidiary any such capital stock or any such convertible or exchangeable
securities or obligations, or (c) obligations of any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(g) You shall have received the written opinion of Jean-Marc
Laveissiere, General Counsel and Secretary of Forasol S.A., addressed to
the Underwriters and dated the Closing Date to the effect that:
(i) each of Forasol S.A., Foramer S.A. and Forinter Ltd. (the
"FORASOL SUBSIDIARIES") has been duly incorporated and is validly existing
as a corporation under the laws of France, with full corporate power and
authority to own its properties and to conduct its business as described
in the Registration Statement and the Prospectus;
(ii) each of the Forasol Subsidiaries is duly qualified and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(iii) all of the issued and outstanding capital stock of each
of the Forasol Subsidiaries has been duly authorized and validly issued,
and is fully paid and nonassessable, and except as disclosed in the
Prospectus and such minimum minority interests as may be required by
applicable French law, the shares of capital stock of each Forasol
Subsidiary are owned directly or indirectly by the Company free and clear
of any perfected security interest and, to such counsel's knowledge, any
other security interests, claims, liens or encumbrances.
(h) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing Date, of Baker & Botts, L.L.P., counsel for
the Company, to the effect that:
(i) to such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for
any capital stock of the Company or any such subsidiary, (b) warrants,
rights or options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such convertible or
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exchangeable securities or obligations, or (c) obligations of the Company
or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or options;
(ii) the Indenture, assuming due authorization, execution and
delivery thereof by the Company and the Trustee, is a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws then or thereafter
in effect relating to or affecting rights and remedies of creditors, and
to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and to the discretion of the
court before which any proceeding therefor may be brought;
(iii) the Securities, when issued, executed and authenticated
in accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters in accordance with the terms of this Agreement,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws then or thereafter in effect relating to or affecting
rights and remedies of creditors, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and to the discretion of the court before which any proceeding
therefor may be brought;
(iv) This Agreement (assuming the due authorization, execution
and delivery hereof by the Company and the valid authorization, execution
and delivery by the Underwriters) is a valid and binding agreement of the
Company enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by applicable law)
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws then or thereafter in effect
relating to or affecting rights and remedies of creditors, and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and to the discretion of the court before
which any proceeding therefor may be brought;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and to the knowledge of such counsel no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings therefor initiated or threatened by the
Commission;
(vi) each document previously filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus, at the time it was
filed or last amended (except
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for financial statements, the notes thereto and related schedules and
other financial, numerical, statistical or accounting data included or
incorporated by reference therein or omitted therefrom, as to which such
counsel need express no opinion), appeared on its face to comply as to
form in all material respects to the applicable requirements of the
Exchange Act.
(vii) the Indenture complies as to form in all material
respects with the Trust Indenture Act of 1939, as amended (the "TIA"), and
the rules and regulations thereunder and, upon effectiveness of the
Registration Statement, will be duly qualified under the TIA;
(viii) to the knowledge of such counsel, no authorization,
approval, consent or order of any court or United States Federal or State,
governmental authority or agency is required to be obtained by the Company
in connection with the sale by the Company of the Securities to you,
except (a) such as have been obtained under the Act, and (b) such as may
be required by the NASD or under the state Securities or Blue Sky laws or
regulations of any jurisdiction in the United States in connection with
the purchase and distribution of the Securities by the Underwriters
(ix) the respective provisions of the Securities and the
Indenture described in the Registration Statement and the Prospectus
conform in all material respects to the respective descriptions thereof
contained in the Registration statement and the Prospectus;
(x) the Registration Statement, at the time it became
effective, and the Prospectus, on its issue date and on the Closing Date
(except, in each case, for financial statements, the notes thereto, the
auditors' report thereon and related schedules and other financial,
numerical, statistical or accounting data included or incorporated by
reference therein or omitted therefrom, as to which no opinion need be
expressed), appeared on their face to comply as to form in all material
respects with the applicable requirements of the Act; to the knowledge of
such counsel, there are no contracts or agreements to which the Company or
any Subsidiary is a party or by which any of them may be bound that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement other than those
described therein or filed or incorporated by reference as exhibits
thereto;
(xi) neither the issuance and sale of the Securities, nor the
performance of the Company's obligations pursuant to this Agreement or the
Indenture will conflict with, result in a breach of, or constitute a
default under (A) the terms of any Indenture or other agreement or
instruments and to which the Company or any subsidiary is a party or bound
which is material to the Company and its Subsidiaries considered as a
whole and of which such counsel has knowledge, (B) any statute, rule or
regulation to which the Company or any Subsidiary is a party or by which
any of them is bound, or to which any of the properties of
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the Company or any Subsidiary is subject, or (C) any order of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of their properties of which such counsel has knowledge;
(xii) to the knowledge of such counsel, there is no current,
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary or to which any of their respective property is
subject of a character required to be disclosed in the Registration
Statement which is not disclosed in the Prospectus;
(xiii) the Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(xiv) to the knowledge of such counsel, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company as part of or under the
Registration statement;
(i) You shall have received an opinion (satisfactory to you and your
counsel), dated the Closing, of Robert W. Randall, General Counsel of the
Company, to the effect that:
(i) each of the Subsidiaries that has been organized under the
laws of a state of the United States (the "U.S. SUBSIDIARIES") has been
duly organized and is validly existing as corporations in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power and authority to own and lease its properties and to conduct its
business as described in the Prospectus;
(ii) the Company and each of the U. S. Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a Material Adverse
Effect;
(iii) all of the issued and outstanding capital stock of each
of the U. S. Subsidiaries has been duly authorized and validly issued, and
is fully paid and nonassessable, and except as disclosed in the
Prospectus, the shares of capital stock of each U.S. Subsidiary are owned
directly or indirectly by the Company free and clear of any perfected
security interest and, to such counsel's knowledge, any other security
interests, claims, liens or encumbrances;
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(iv) to such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding (a) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for
any capital stock of the Company or any such subsidiary, (b) warrants,
rights or options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (c) obligations of the Company
or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or options;
(v) neither the issuance and sale of the Securities, nor the
performance of the Company's obligations pursuant to this Agreement or the
Indenture will violate any of the provisions of the charter or by-laws of
the Company or any U.S. Subsidiary as in effect on the date of the
opinion;
(vi) to the knowledge of such counsel, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company as part of or under the
Registration Statement;
(vii) to the knowledge of such counsel, there is no current,
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary or to which any of their respective property is
subject of a character required to be disclosed in the Registration
Statement which is not disclosed in the Prospectus;
(viii) except as will not have a Material Adverse Effect, to
the knowledge of such counsel, each of the Company and its Subsidiaries
has such Permits as are in all material respects, necessary to own, lease
and operate their respective properties and to conduct their respective
businesses in the manner described in the Prospectus; to the knowledge of
such counsel, each of the Company and its Subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit, subject in each
case to such qualification as may be set forth in the Prospectus;
(ix) to the knowledge of such counsel, neither the issuance
and sale of the Securities, nor the performance of the Company's
obligations pursuant to this Agreement or the Indenture will (A) conflict
with, result in a breach of, or constitute a default under the terms of
any material indenture or other material agreement or instrument to which
any Subsidiary is a party or bound, or constitute a default under, any
statutes rule or regulation to which any Subsidiary is a party or by which
any of them is bound, or to which any of the properties of any non-U.S.
Subsidiary is subject, or any order of any court or governmental
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agency or body having jurisdiction over any non-U.S. Subsidiary or any of
their properties, except as will not have a Material Adverse Effect, or
(B) violate any of the provisions of the charter or by-laws of any
non-U.S. Subsidiary as in effect on the date of the opinion; and
(x) the respective provisions of the employment agreements and
the Pride Petroleum Services, Inc. Long-Term Incentive Plan described in
the Company's proxy statement incorporated by reference into the
Prospectus conform in all material respects to the respective descriptions
thereof contained in such proxy statement.
In addition, each of Baker & Botts, L.L.P. and Robert W. Randall
shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, your representatives and
your counsel at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel
did not independently verify such information and is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing (relying as to the factual
matters upon the statements of officers and other representatives of the
Company and state officials and as to materiality to a large degree on
officers and other representatives of the Company and your
representatives) no facts came to such counsel's attention that led such
counsel to believe that the Registration Statement (other than the
financial statements, the notes thereto and the auditors' report thereon
and other financial, numerical, statistical and accounting data included
or incorporated by reference therein, or omitted therefrom, or the
exhibits thereto or the Form T-1, as to which such counsel need express no
belief) as amended or supplemented, at the time such Registration
Statement or any post-effective amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or the Prospectus (other than the financial statements and
notes thereto and other financial, numerical, statistical and accounting
data included or incorporated by reference therein, or omitted therefrom,
as to which such counsel need express no belief) as amended or
supplemented, as of its date and the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
The opinion of McGlinchey Stafford shall be limited to the laws of
the State of Louisiana. The opinion of Baker & Botts, L.L.P. shall be
limited to the laws of the United States and the laws of the State of New
York and the State of Texas. The opinion of Robert W. Randall shall be
limited to the laws of the United States, the laws of the State of Texas,
and the corporate law of the State of Delaware. The opinion of each
foreign counsel shall be limited to the laws of the jurisdiction in which
the Subsidiary with respect to which such opinion is given is organized.
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(j) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Vinson & Elkins L.L.P., counsel for the Underwriters,
in form and substance reasonably satisfactory to you.
(k) You shall have received letters on and as of the date hereof as
well as on and as of the Closing Date (in the latter case constituting an
affirmation of the statements set forth in the former, based on limited
procedures), in form and substance satisfactory to you, from Coopers &
Lybrand L.L.P., and Ernst & Young, L.L.P., independent public accountants
and any other independent public accountants deemed necessary by counsel
to the Underwriters, with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(l) Prior to the Closing Date, the Company shall have furnished to
you or caused to be furnished to you such further information,
certificates and documents as you may reasonably request.
(m) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to
the Closing Date.
(n) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 436(g) under the Act, nor shall any such organization have advised
the Company or the Underwriters, that (i) it is downgrading its rating
assigned to any class of Securities of the Company or (ii) it is reviewing
any such rating with a view to possible downgrading, or with negative
implications, or direction not determined.
11. DEFAULTS AND TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date, as the case may be, by you by written notice to the
Company if any of the following has occurred: (i) subsequent to the date of this
Agreement, any Material Adverse Change to the Company, which would, in your
opinion, make it impracticable or inadvisable to market the Securities, or to
enforce contracts for the sale of the Securities, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or material adverse change in the financial markets of the United states or
elsewhere, if the effect of such outbreak, escalation, calamity, crisis or
change in such financial markets would, in your opinion, make it impracticable
or inadvisable to market the Securities or to enforce contracts for the sale of
the Securities, (iii) any suspension of trading generally in Securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market or limitation on prices for Securities on any such exchange or system,
(iv) the delisting of the Common Stock from the Nasdaq National Market, (v) any
declaration of a general banking moratorium by either Federal or New York state
authorities, (vi) the enactment, publication, decree or other promulgation of
any Federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion would have a
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<PAGE>
Material Adverse Effect, (vii) the taking of any action by any Federal, state or
local government or agency in respect of its monetary or fiscal affairs that in
your opinion has a material adverse effect on the financial markets in the
United States, and would, in your opinion, make it impracticable or inadvisable
to market the Securities or (viii) the Securities shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
If on the Closing Date, any of the Underwriters shall fail or refuse to
purchase the Securities which it has agreed to purchase hereunder on such date,
and the aggregate principal amount of such Securities that such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase does not exceed 10% of the total principal amount of such Securities to
be purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the amount of Securities
set forth opposite its name in Schedule I hereto bears to the aggregate
principal amount of Securities which all the non-defaulting Underwriters, as the
case may be, have agreed to purchase, or in such other proportion as you (at
your option) may specify, to purchase the Securities that such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the aggregate principal
amount of the Securities that any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 11 by an amount in excess
of one-ninth of such principal amount of Securities without the written consent
of such Underwriter. If, on the Closing Date any of the Underwriters shall fail
or refuse to purchase the Securities and the total principal amount of
Securities with respect to which such default occurs exceeds 10% of the total
amount of Securities to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 48 hours after such default, this Agreement shall
terminate without liability on the part of the non-defaulting Underwriters and
the Company, except as otherwise provided in this Section 11. In any such case
that does not result in termination of this Agreement, either you or the Company
may postpone the Closing Date, as the case may be, for not longer than seven (7)
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve a defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
The indemnity and contribution provisions and the other agreements,
representations and warranties set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Securities, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any of the
Underwriters or by or on behalf of the Company or the officers or directors of
the Company or any controlling person of the Company, (ii) acceptance of the
Securities and payment for them hereunder and (iii) termination of this
Agreement.
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<PAGE>
If this Agreement shall be terminated by the Underwriters pursuant to
clause (i) or (viii) of the second paragraph of this Section 11 as a result of
any act or omission of the Company or because of the failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, the Company agrees to reimburse you for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by you. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it agrees to pay pursuant to
Section 7 hereof.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, any
indemnified party referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
terms "successors and assigns" shall not include a purchaser of any of the
Securities from any of the several Underwriters merely because of such purchase.
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to it at 1500
City West Boulevard, Suite 400, Houston, Texas 77042, Attention: Robert W.
Randall, with a copy to Baker & Botts, L.L.P., at 3000 One Shell Plaza, Houston,
Texas 71002, Attention: L. Proctor Thomas, Esq., (b) if to any Underwriter, to
Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway, New York, New
York 10005, Attention: Syndicate Department and, in each case, with a copy to
Vinson & Elkins L.L.P., 1001 Fannin, Suite 2300, Houston, Texas 77002,
Attention: T. Mark Kelly, or in any case to such other address as the person to
be notified may have requested in writing.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
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<PAGE>
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company and you.
Very truly yours,
PRIDE PETROLEUM SERVICES, INC.
By: /s/ EARL W. MCNIEL
Name: Earl McNiel
Title: Chief Financial Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
Date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ C. MITCHELL COX
Name: C. Mitchell Cox
Title:Vice President
JEFFERIES & COMPANY, INC.
By: /s/ JAY LEVY
Name: Jay Levy
Title:Vice President
ROBERT W. BAIRD & CO. INCORPORATED
By: /s/ STEVEN G. BOOTH
Name: Steven G. Booth
Title:Managing Director
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<PAGE>
SIMMONS & COMPANY INTERNATIONAL
By: /s/ A. B. BANHAM
Name: A. B. Banham
Title:Managing Director
SOUTHCOAST CAPITAL CORPORATION
By: /s/ JOSEPH L. CARRERE
Name: Joseph L. Carrere
Title:President
-30-
<PAGE>
SCHEDULE I
PRINCIPAL
AMOUNT
------
Donaldson, Lufkin & Jenrette
Securities Corporation $130,000,000
Jefferies & Company, Inc. 97,500,000
Robert W. Baird & Co. Incorporated 24,375,000
Morgan Keegan & Company, Inc. 24,375,000
Simmons & Company International 24,375,000
Southcoast Capital Corporation 24,375,000
Total $325,000,000
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PRIDE PETROLEUM SERVICES, INC.
and
THE CHASE MANHATTAN BANK
Trustee.
-------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of May __, 1997
-------------------------------
Supplementing the Indenture
dated as of
May __, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
PAGE
<S> <C>
ARTICLE ONE SUPPLEMENT OF THE ORIGINAL INDENTURE............................................1
SECTION 1.1. SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE...........................1
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE.........................16
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE........................18
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE.........................19
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE..........................19
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE.......................28
SECTION 1.8. NEW ARTICLE FOURTEEN.........................................................29
SECTION 1.9. EFFECT OF ARTICLE ONE........................................................33
ARTICLE TWO THE NOTES......................................................................33
ARTICLE THREE REPRESENTATIONS OF THE COMPANY.................................................34
SECTION 3.1. AUTHORITY OF THE COMPANY.....................................................34
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS.............................................34
ARTICLE FOUR CONCERNING THE TRUSTEE.........................................................34
SECTION 4.1. ACCEPTANCE OF TRUSTS.........................................................34
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC...............................34
ARTICLE FIVE MISCELLANEOUS PROVISIONS.......................................................34
SECTION 5.1. RELATION TO THIS INDENTURE...................................................34
SECTION 5.2. MEANING OF TERMS.............................................................35
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE.......................................35
SECTION 5.4. GOVERNING LAW................................................................35
</TABLE>
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<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of May __, 1997, between
Pride Petroleum Services, Inc., a Louisiana corporation (the "Company"), and The
Chase Manhattan Bank, as Trustee (the "Trustee") under the Original Indenture
referred to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to time
of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture of even
date herewith (the "Original Indenture") pursuant to which the Securities are
issuable;
WHEREAS, Sections 201 and 901 of the Original Indenture provide that
the form or terms of any series of Securities may be established in an Indenture
supplemental thereto, and the Company desires to establish in this First
Supplemental Indenture both the form and terms of a series of Securities
designated as its 93/8% Senior Notes due 2007 (the "Notes");
WHEREAS, Section 901 of the Original Indenture further provides that
under certain conditions the Company and Trustee, may, without the consent of
any Holders, from time to time and at any time, enter into an Indenture or
Indentures supplemental thereto, for the purposes, INTER ALIA, of adding to the
covenants of the Company for the benefit of the Holders of all or any series of
Securities, and adding any additional Events of Default, and the Company desires
by means of this First Supplemental Indenture to add to its covenants for the
sole benefit of the Holders of the Notes and to add certain additional Events of
Default, also solely for the benefit of such Holders; and
WHEREAS, all things necessary to authorize the execution and delivery
of this First Supplemental Indenture, to establish the Notes as provided for in
this First Supplemental Indenture, and to make the Original Indenture, as
supplemented by this First Supplemental Indenture (the Original Indenture, as so
supplemented by this Supplemental Indenture, being sometimes referred to herein
as the "Indenture"), a valid agreement of the Company, in accordance with its
terms, have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that for and in consideration of the premises and the purchase of the Notes by
the Holders, the Company and the Trustee mutually covenant and agree, solely for
the equal and proportionate benefit of the respective Holders from time to time
of the Notes, as follows:
ARTICLE ONE
SUPPLEMENT OF THE ORIGINAL INDENTURE
SECTION 1.1. SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE.
Section 101 of the Original Indenture is supplemented or superseded with respect
to the Notes, in the case of definitional paragraphs that may be inconsistent,
by inserting therein, in alphabetical order, the following definitional
paragraphs:
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<PAGE>
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the Fair Value of the properties and assets of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction other than a Sale
and Lease-Back Transaction that results in the creation or incurrence of (a) a
Capital Lease Obligation of the Company or any Subsidiary or (b) a lease of
newly constructed assets, which lease is treated as an operating lease in
accordance with GAAP and entered into within 180 days of completion of
construction) by the Company or any Subsidiary to any Person other than the
Company or a Wholly Owned Subsidiary, in one transaction, or a series of related
transactions, of (i) any Capital Stock of any Subsidiary (except for directors'
qualifying shares or certain minority interests sold to other Persons solely due
to local law requirements that there be more than one stockholder, but which are
not in excess of what is required for such purpose) or (ii) any other Property
or assets of the Company or any Subsidiary, other than (A) sales of drill-string
components and obsolete or worn out equipment in the ordinary course of business
or other assets that, in the Company's reasonable judgment, are no longer used
or useful in the conduct of the business of the Company and its Subsidiaries,
(B) any drilling contract, charter (bareboat or otherwise) or other lease of
Property or other asset entered into by the Company or any Subsidiary in the
ordinary course of business, other than any Bargain Purchase Contract, (C) a
Restricted Payment or Permitted Investment permitted under Section 1009 hereof,
(D) a Change of Control, (E) a consolidation, merger or the disposition of all
or substantially all of the assets of the Company in compliance with Section 801
hereof, (F) any trade or exchange by the Company or any Subsidiary of one or
more drilling rigs for one or more other drilling rigs of like kind owned or
held by another Person, PROVIDED that (x) the Fair Value of the rig or rigs
traded or exchanged by the Company or such Subsidiary (including cash or cash
equivalents to be delivered by the Company or such Subsidiary) is reasonably
equivalent to the Fair Value of the drilling rig or rigs (together with cash or
cash equivalents to be received by the Company or such Subsidiary) as determined
by written appraisal by a nationally (or industry) recognized investment banking
firm or appraisal firm and (y) such exchange is approved by a majority of the
disinterested directors of the Company and (G) any transfers that, but for this
clause (G), would be Asset Sales, if (y) the Company elects to designate such
transfers as not constituting Asset Sales and (z) after giving effect to such
transfers, the aggregate Fair Market Value of the Property or assets transferred
in such transaction or any such series of related transactions so designated by
the Company does not exceed $500,000. An Asset
- 2 -
<PAGE>
Sale shall include the requisition of title to, seizure of or forfeiture of any
Property or assets, or any actual or constructive total loss or an agreed or
compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value (discounted
at the interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease (or to the first date on which the lessee is permitted to terminate such
lease without the payment of a penalty) included in such Sale and Lease-Back
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (x)
the number of years from such date to the date of each scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied in each case by (y) the amount of
such principal payment by (ii) the sum of all such principal payments.
"Bargain Purchase Contract" means a drilling contract, charter
(bareboat or otherwise) or lease that provides for acquisition of Property by
the other party to such agreement during or at the end of the term thereof for
less than Fair Market Value thereof at the time such right to acquire such
Property is granted.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
an equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate consideration received for such Asset Sale by such Person in the
form of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof). For purposes of this
definition, "cash or cash equivalents" shall be deemed to include, for a period
not to exceed 12 months from the related Asset Sale, noncash consideration
received with respect to an Asset Sale to the extent that such noncash
consideration consists of (i) publicly traded debt securities of a Person, which
securities are rated as "BBB-" or higher by Standard & Poor's Ratings Services
("S&P") and "Baa3" or higher by Moody's Investors Service, Inc. ("Moody's"), or
(ii) other Indebtedness of a Person if (x) the lowest rated long-term, unsecured
debt obligation issued by such Person is rated "BBB-" or higher by S&P and
"Baa3" or higher by Moody's or (y) in the case of other Indebtedness, the
payment of such other Indebtedness is secured by an
- 3 -
<PAGE>
irrevocable letter of credit issued by a commercial bank having capital and
surplus in excess of $100 million and long-term unsecured debt obligations rated
at least "A-" by S&P and "A3" by Moody's.
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")) has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the Voting Stock of the Company; (ii) the Company is merged
with or into or consolidated with another corporation and, immediately after
giving effect to the merger or consolidation, less than 50% of the outstanding
voting securities entitled to vote generally in the election of directors or
persons who serve similar functions of the surviving or resulting entity are
then beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if the record date has been set to
determine the stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date; (iii) the
Company, either individually or in conjunction with one or more Subsidiaries,
sells, conveys, transfers or leases, or the Subsidiaries sell, convey, transfer
or lease, all or substantially all of the assets of the Company and the
Subsidiaries, taken as a whole (either in one transaction or a series of related
transactions), including Capital Stock of the Subsidiaries, to any Person (other
than a Wholly Owned Subsidiary); (iv) the liquidation or dissolution of the
Company; or (v) the first day on which a majority of the individuals who
constitute the Board of Directors are not Continuing Directors.
"Consolidated Current Liabilities" of any Person means, as of any date,
the total liabilities (including tax and other proper accruals) of such Person
and its subsidiaries (other than Non-Recourse Subsidiaries) on a consolidated
basis at such date which may properly be classified as current liabilities in
accordance with GAAP.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company for the latest four fiscal quarters for which financial
information in respect thereof is available immediately prior to the applicable
Transaction Date (the "Determination Period") to (ii) the aggregate Consolidated
Interest Expense of the Company that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of; and interest payments in respect of, Indebtedness of the
Company and its consolidated Subsidiaries expected by the Company to be
outstanding on the Transaction Date and reasonably anticipated by the Company to
be outstanding from time to time during such period), assuming for the purposes
of this measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date, PROVIDED that if the Company or any of its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) is a party to any Interest
Swap Obligation which would have the effect of changing the interest rate on any
Indebtedness of the Company or any of its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such four-quarter period (or a portion thereof),
the resulting rate shall be used for such four-quarter period or portion
thereof; PROVIDED, HOWEVER, that any Consolidated Interest Expense of the
Company with respect to Indebtedness incurred or retired by
- 4 -
<PAGE>
the Company or any of its Subsidiaries (other than Non-Recourse Subsidiaries)
during the fiscal quarter in which the Transaction Date occurs shall be
calculated as if such debt was so incurred or retired on the first day of the
fiscal quarter in which the Transaction Date occurs; PROVIDED, FURTHER, that if
the transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio would have the effect of increasing or decreasing EBITDA in the
future and if such increase or decrease is readily quantifiable and is directly
attributable to such transaction, EBITDA shall be calculated on a pro forma
basis as if such transaction had occurred on the first day of the four fiscal
quarters referred to in clause (i) of this definition, and if, during the same
four fiscal quarters, (x) the Company or any of its consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) shall have engaged in any Asset Sale,
EBITDA for such period shall be reduced by an amount equal to the EBITDA (if
positive), or increased by an amount equal to the EBITDA (if negative), directly
attributable to the assets which are the subject of such Asset Sale for such
period calculated on a pro forma basis as if such Asset Sale and any related
retirement of Indebtedness had occurred on the first day of such period or (y)
after the Issue Date, the Company or any of its consolidated Subsidiaries (other
than Non-Recourse Subsidiaries) shall have acquired any material assets other
than in the ordinary course of business, EBITDA and Consolidated Interest
Expense (if Indebtedness is incurred or assumed in connection with such
acquisition) shall be calculated on a pro forma basis as if such acquisition and
related financing had occurred on the first day of such period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, (A) the sum of (i) the aggregate amount of cash
and noncash interest expense (including capitalized interest) of such Person and
its subsidiaries (other than Non-Recourse Subsidiaries) for such period as
determined on a consolidated basis in accordance with GAAP in respect of
Indebtedness (including, without limitation, (v) any amortization of debt
discount, (w) net costs associated with Interest Swap Obligations (including any
amortization of discounts), (x) the interest portion of any deferred payment
obligation, (y) all accrued interest and (z) all commissions, discounts and
other fees and charges owed with respect to letters of credit, bankers
acceptances or similar facilities paid or accrued, or scheduled to be paid or
accrued, during such period other than in respect of Non-Recourse Indebtedness);
(ii) dividends on preferred stock of such Person (and preferred stock of its
subsidiaries (other than Non-Recourse Subsidiaries) if paid to a Person other
than such Person or its subsidiaries) declared and payable in cash; (iii) the
portion of any rental obligation of such Person or its subsidiaries (other than
Non-Recourse Subsidiaries) in respect of any Capital Lease Obligation allocable
to interest expense in accordance with GAAP; (iv) the portion of any rental
obligation of such Person or its subsidiaries (other than Non-Recourse
Subsidiaries) in respect of any Sale and Lease-Back Transaction allocable to
interest expense (determined as if such were treated as a Capital Lease
Obligation); and (v) to the extent any debt of any other Person is guaranteed by
such Person or any of its subsidiaries (other than Non-Recourse Subsidiaries),
(A) the aggregate amount of interest paid, accrued or scheduled to be paid or
accrued, by such other Person during such period attributable to any such debt,
LESS (B) to the extent included in (A) above, amortization or writeoff of
deferred financing costs of such Person and its subsidiaries during such period
and any charge related or any premium or penalty paid in connection with
redeeming or retiring any Indebtedness of such Person and its subsidiaries prior
to its stated maturity; in the case of both (A) and (B) above, after elimination
of intercompany accounts among such Person and its subsidiaries and as
determined in accordance with GAAP.
- 5 -
<PAGE>
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, PROVIDED that there shall be excluded therefrom, without duplication,
(i) any net income of any Non-Recourse Subsidiary, except that the Company's or
any Subsidiary's equity in the net income of such Non-Recourse Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or cash equivalents actually distributed by such
Non-Recourse Subsidiary during such period to the Company or such subsidiary as
a dividend or other distribution, (ii) gains and losses from Asset Sales or
reserves relating thereto, (iii) items classified as extraordinary (other than
the tax benefit, if any, of the utilization of net operating loss carryforwards
or alternative minimum tax credits), (iv) the net income of any Person acquired
by such specified Person (other than a Non-Recourse Subsidiary) or any of its
subsidiaries in a pooling-of-interests transaction for any period prior to the
date of such acquisition, (v) any gain or loss, net of taxes, realized on the
termination of any employee pension benefit plan, and (vi) the net income of any
subsidiary of such specified Person to the extent that the transfer to that
Person of that income is not at the time permitted, directly or indirectly, by
any means (including by dividend, distribution, advance or loan or otherwise),
by operation of the terms of its charter or any agreement with a Person other
than with such specified Person, instrument held by a Person other than by such
specified Person, judgment, decree, order, statute, law, rule or governmental
regulations applicable to such subsidiary or its stockholders, except for any
dividends or distributions actually paid by such subsidiary to such Person.
"Consolidated Net Tangible Assets" of any Person means, as of any date,
Consolidated Tangible Assets of such Person at such date, after deducting
therefrom (without duplication of deductions) all Consolidated Current
Liabilities of such Person at such date.
"Consolidated Net Worth" of any Person means, as of any date, the sum
of the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person and its subsidiaries on a consolidated
basis at such date, each item determined in accordance with GAAP, less amounts
attributable to Redeemable Stock of such Person or any of its subsidiaries.
"Consolidated Tangible Assets" of any Person means, as of any date, the
consolidated assets of such Person and its subsidiaries (other than Non-Recourse
Subsidiaries) at such date, after eliminating intercompany items and after
deducting from such total (i) the net book value of all assets that would be
classified as intangibles under GAAP (including, without limitation, goodwill,
organizational expenses, trademarks, trade names, copyrights, patents, licenses
and any rights in any thereof) and (ii) any prepaid expenses, deferred charges
and unamortized debt discount and expense, each such item determined in
accordance with GAAP.
"Continuing Director" means an individual who (i) is a member of the
Board of Directors of the Company and (ii) either (A) was a member of the Board
of Directors of the Company on the Issue Date or (B) whose nomination for
election or election to the Board of Directors of the Company was approved by
vote of at least 662/3% of the directors then still in office who were either
directors on the Issue Date or whose election or nomination for election was
previously so approved.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign
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currency exchange agreement, option or future contract or other similar
agreement or arrangement designed to protect against or manage such Person's or
any of its subsidiaries' exposure to fluctuations in foreign currency exchange
rates.
"Default" means any event, act or condition the occurrence of which is,
or after notice or the passage time or both would be, an Event of Default.
"Determination Period" has the meaning specified under clause (i) of
the definition of "Consolidated Interest Coverage Ratio."
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such person, for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity, and (vi) any other non-cash charges.
"Fair Market Value" means, with respect to consideration received or to
be received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Fair Value" means, with respect to any asset or Property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"Funded Indebtedness" means all Indebtedness incurred under any
revolving credit, letter of credit or working capital facility that matures by
its terms, or that is renewable at the option of any obligor therein to a date
more than one year after the date on which such Indebtedness is originally
incurred.
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; PROVIDED,
HOWEVER, that all calculations made for purposes of determining compliance with
the provisions set forth in Article 10 hereof shall utilize GAAP in effect at
the Issue Date.
"Indebtedness" as applied to any Person means, at any time, without
duplication, (i) any obligation of such Person, contingent or otherwise, for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) any obligation of such
Person for all or any part of the purchase price of Property or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable included in current liabilities incurred in respect of Property and
services purchased in the ordinary course of business; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable
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<PAGE>
incurred in the ordinary course of business); (v) any obligation of such Person
under conditional sale or other title retention agreements relating to purchased
Property; (vi) any obligation of such Person issued or assumed as the deferred
purchase price of Property (other than accounts payable incurred in the ordinary
course of business); (vii) any Capital Lease Obligation; (viii) any obligation
of any other Person secured by (or for which the obligee thereof has an existing
right, contingent or otherwise, to be secured by) any Lien on Property owned or
acquired, whether or not any obligation secured thereby has been assumed, by
such Person; (ix) any obligation of such Person in respect of any letter of
credit supporting any obligation of any other Person; (x) the maximum fixed
repurchase price of any Redeemable Stock of such Person (or if such Person is a
subsidiary, any preferred stock of such Person); (xi) any Interest Swap
Obligation or Currency Hedge Obligation of such Person; and (xii) any obligation
which is in economic effect a guarantee, regardless of its characterization
(other than an endorsement in the ordinary course of business), with respect to
any Indebtedness of another Person, to the extent guaranteed. For purposes of
the preceding sentence, the maximum fixed repurchase price of any Redeemable
Stock or subsidiary preferred stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Redeemable Stock or
subsidiary preferred stock as if such Redeemable Stock or subsidiary preferred
stock were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; PROVIDED, HOWEVER, that if such
Redeemable Stock or subsidiary preferred stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Redeemable
Stock or subsidiary preferred stock. The amount of Indebtedness of any Person at
any date shall be (x) the outstanding book value at such date of all
unconditional obligations as described above and (y) the maximum liability of
any such contingent obligation at such date.
"Interest Swap Obligations" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means with respect to any Person, any investment in
another Person, whether by means of a share purchase, capital contribution,
loan, advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures or prepayments or deposits in the
ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person and any guarantee of Indebtedness of any other
Person; PROVIDED, HOWEVER, that the term "Investment" shall not include any
transaction involving the purchase or other acquisition (including by way of
merger) of Property (including Capital Stock) by the Company or any Subsidiary
in exchange for Capital Stock (other than Redeemable Stock) of the Company. The
amount of any Person's Investment shall be the original cost of such Investment
to such Person, PLUS the cost of all additions thereto paid by such Person, and
MINUS the amount of any portion of such Investment repaid to such Person in cash
as a repayment of principal or a return of capital, as the case may be, but
without any other adjustments for increases or decreases in value, or writeups,
writedowns or writeoffs with respect to such Investment in determining the
amount of any investment involving a transfer of any Property other than cash,
such Property shall be valued at its Fair Value at the time of such transfer as
determined in good faith by the board of directors (or comparable body) of the
Person making such transfer.
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<PAGE>
"Issue Date" means the date on which the Notes are first authenticated
and delivered under this Indenture.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Limited Recourse Indebtedness" means (i) Indebtedness with respect to
the two drilling/workover barge rigs owned by the Company's Venezuelan
subsidiary as in effect on the date of this Indenture (the "Venezuelan Barge
Financing") and (ii) Indebtedness incurred to finance the purchase, acquisition,
renovation or construction of capital assets and related items (including
interest added to principal), or refinancings thereof, (a) in respect of which
the recourse of the holder of such Indebtedness is effectively limited to such
capital assets and related items or (b) in which the recourse and security are
similar to (or more favorable to the Company and its Subsidiaries than) the
Venezuelan Barge Financing.
"Maturity" means the date on which the principal of a Note becomes due
and payable as provided therein or in this Indenture, whether at the Stated
Maturity or by declaration of acceleration or otherwise.
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of all legal and
title expenses, commissions and other fees and expenses incurred, and all
Federal, state, provincial, foreign, recording and local taxes payable as a
consequence of such Asset Sale, net of all payment made to any Person other than
the Company or a Subsidiary on any Indebtedness which is secured by such assets,
in accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale
and, as for any Asset Sale by a Subsidiary, net of the equity interest in such
Cash Proceeds of any holder of Capital Stock of such Subsidiary (other than the
Company or any other Subsidiary) and (b) as to any Bargain Purchase Contract, an
amount equal to (i) that portion of the rental or other payment stream arising
under a Bargain Purchase Contract that represents an amount in excess of the
Fair Market Value of the rental or other payments with respect to the pertinent
Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amounts set forth in clause (a) above, in
each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the Company
nor any other Subsidiary (other than a Non-Recourse Subsidiary) (i) provides
credit support including any undertaking, agreement or instrument which would
constitute Indebtedness or (ii) is directly or indirectly liable for such
Indebtedness and (b) no default with respect to such Indebtedness (including any
rights which the holders thereof may have to take enforcement action against a
Non-Recourse Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Company or its Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
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<PAGE>
"Non-Recourse Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination will be designated a Non-Recourse Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of a
Non-Recourse Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company as a Non-Recourse Subsidiary so long as (a) neither
the Company nor any Subsidiary is directly or indirectly liable pursuant to the
terms of any Indebtedness of such Subsidiary; (b) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Subsidiary
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; (c) neither the Company
nor any Subsidiary has made an Investment in such Subsidiary unless such
Investment was made pursuant to, and in accordance with, Section 1009 hereof
(other than Investments of the type described in clause (i) of the definition of
"Permitted Investments"); and (d) such designation shall not result in the
creation or imposition of any Lien on any Property of the Company or any
Subsidiary (other than any Permitted Lien or any Lien the creation or imposition
of which shall have been in compliance with Section 1015 hereof); PROVIDED,
HOWEVER, that with respect to clause (a), the Company or a Subsidiary may be
liable for Indebtedness of a Non-Recourse Subsidiary if (x) such liability
constituted a Permitted Investment or a Restricted Payment permitted by Section
1009 hereof, in each case at the time of incurrence, or (y) the liability would
be a Permitted Investment at the time of designation of such Subsidiary as a
Non-Recourse Subsidiary. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing a Board Resolution with the
Trustee giving effect to such designation. The Board of Directors of the Company
may designate any Non-Recourse Subsidiary as a Subsidiary if, immediately after
giving effect to such designation, (i) no Default or Event of Default shall have
occurred and be continuing, (ii) the Company could incur $1.00 of additional
Indebtedness (not including the incurrence of Permitted Indebtedness) under the
first paragraph of Section 1010 hereof and (iii) if any Property of the Company
or any of its Subsidiaries would upon such designation become subject to any
Lien (other than a Permitted Lien), the creation or imposition of such Lien
shall have been in compliance with Section 1015 hereof.
"Permitted Indebtedness" means (a) Indebtedness of the Company under
the Notes; (b) Indebtedness (and any guarantee or pledge thereof) under one or
more bank revolving credit facilities in an aggregate principal amount at any
one time outstanding not to exceed the greater of (A) $100 million and (B) an
amount equal to 10% of Consolidated Net Tangible Assets determined as of the
date of the incurrence of such Indebtedness (plus interest and fees under such
facilities), less any amounts derived from Asset Sales and applied to the
permanent reduction of Indebtedness thereunder (and a permanent reduction of the
related commitment to lend thereunder) as contemplated by Section 1013 hereof;
(c) Indebtedness of the Company or any Subsidiary under Interest Swap
Obligations, PROVIDED that (i) such Interest Swap Obligations are related to
payment obligations on Indebtedness otherwise permitted under the covenants
described in Section 1010 hereof and (ii) the notional principal amount of such
Interest Swap Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligations relate; (d) Indebtedness of
the Company or any Subsidiary under Currency Hedge Obligations, PROVIDED that
(i) such Currency Hedge Obligations are related to payment obligations on
Indebtedness otherwise permitted under the covenants described in Section 1010
hereof or to the foreign currency cash flows reasonably expected to be generated
by the Company and the Subsidiaries and (ii) the notional principal amount of
such Currency Hedge Obligations does not exceed the principal amount of the
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<PAGE>
Indebtedness and the amount of the foreign currency cash flows to which such
Currency Hedge Obligations relate; (e) Indebtedness of the Company or any
Subsidiary outstanding on the Issue Date; (f) the Subsidiary Guarantees of the
Notes (and any assumption of the obligations guaranteed thereby); (g)
Indebtedness of the Company or any Subsidiary in respect of bid performance
bonds, surety bonds, appeal bonds and letters of credit or similar arrangement
issued for the account of the Company or any Subsidiary, in each case in the
ordinary course of business; (h) Indebtedness of the Company to any Wholly Owned
Subsidiary (but only so long as it remains a Wholly Owned Subsidiary); (i)
Indebtedness of any Subsidiary (other than a Non-Recourse Subsidiary) to the
Company or any Wholly Owned Subsidiary (but only so long as it remains a Wholly
Owned Subsidiary); (j) Indebtedness of the Company in connection with a purchase
of the Notes pursuant to a Change of Control Offer, PROVIDED that the aggregate
principal amount of such Indebtedness does not exceed 101% of the aggregate
principal amount of the Notes purchased pursuant to such Change of Control Offer
plus the related expenses of such purchase; PROVIDED, FURTHER, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Notes and (B) does not mature prior to one year following
the Stated Maturity of the Notes; (k) Permitted Refinancing Indebtedness and (i)
Permitted Subsidiary Refinancing Indebtedness. So as to avoid duplication in
determining the amount of Permitted Indebtedness under any clause of this
definition, guarantees of, or obligations in respect of letters of credit
supporting, Indebtedness otherwise included in the determination of such amount
shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having capital and surplus in excess of
$100 mullion; (b) commercial paper issued by any corporation, if such commercial
paper has credit ratings of at least A-1 by "S&P" and at least "P-I" by Moody's;
(c) U.S. Government Obligations with a maturity of four years or less; (d)
repurchase obligations for instruments of the type described in clause (c); (e)
shares of money market mutual or similar funds having assets in excess of $100
million; (f) payroll advances in the ordinary course of business; (g) other
advances and loans to officers and employees of the Company or any Subsidiary,
so long as the aggregate principal amount of such advances and loans does not
exceed $500,000 at any one time outstanding; (h) Investments represented by that
portion of the proceeds from Asset Sales (1) that is not Cash Proceeds or (2)
that is deemed to be Cash Proceeds pursuant to the second sentence of the
definition of Cash Proceeds; (i) Investments made by the Company in its Wholly
Owned Subsidiaries (or any Person that will be a Wholly Owned Subsidiary as a
result of such Investment) or by a Subsidiary in the Company or in one or more
Wholly Owned Subsidiaries (or any Person that will be a Wholly Owned Subsidiary
as a result of such Investment); (j) Investments in stock, obligations or
securities received in settlement of debts owing to the Company or any
Subsidiary as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the Company or
any Subsidiary, in each case as to debt owing to the Company or any Subsidiary
that arose in the ordinary course of business of the Company or any such
Subsidiary, provided that any stocks, obligations or securities received in
settlement of debts that arose in the ordinary course of business (and received
other than as a result of bankruptcy or insolvency proceedings or upon
foreclosure, perfection or enforcement of any Lien) that are, within 30 days of
receipt, converted into cash or cash equivalents shall be treated as having been
cash or cash equivalents at the time received; (k) Investments in any Person
(other than the Company or any Wholly Owned Subsidiary) engaged in construction,
ownership or operation of rigs and related equipment pursuant to the tender of
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Petrobras for construction and operation of two dynamically positioned
semi-submersible rigs designated Amethyst 2 and 3 in an aggregate amount not to
exceed $35 million at any time outstanding; and (1) Investments in any Person
(other than the Company or any Wholly Owned Subsidiary) engaged in the
construction, ownership or operation of rigs and related equipment pursuant to
Lagoven, S.A.'s Call for Bids No. 96-0-016-4-0 for construction and operations
of "Multipurpose Units" in Venezuela in an aggregate amount not to exceed $15
million at any time outstanding.
"Permitted Liens" means (a) Liens in existence on the Issue Date; (b)
Liens created for the benefit of the Notes; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation of,
such transaction), PROVIDED that such Lien relates solely to such Property and
the proceeds thereof and accessories and upgrades thereto; (d) Liens on Property
existing at the time of the acquisition thereof (and not incurred as a result
of, or in anticipation of, such transaction), PROVIDED that such Liens relate
solely to such Property and the proceeds thereof and accessories and upgrades
thereto; (e) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (f) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens and Liens for master's and crew's
wages and other similar maritime Liens, and incurred in the ordinary course of
business; (g) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property and defects, irregularities and
deficiencies in title to real property that do not, individually or in the
aggregate, materially affect the ability of the Company or any Subsidiary to
conduct its business presently conducted; (h) Liens for taxes or assessments or
other governmental charges or levies not yet due and payable, or the validity of
which is being contested by the Company or a Subsidiary in good faith
appropriate proceedings upon stay of execution or the enforcement thereof and
for which adequate reserves in accordance with GAAP or other appropriate
provision has been made; (i) Liens to secure Indebtedness incurred for the
purpose of financing all or a part of the purchase price or construction cost of
Property (including the cost of upgrading or refurbishing rigs or drillships)
acquired or constructed after the Issue Date, PROVIDED that (1) the principal
amount of Indebtedness secured by such Liens shall not exceed 100% of the lesser
of cost or Fair Market Value of the Property so acquired, upgraded or
constructed plus transaction costs related thereto, (2) such Liens shall not
encumber any other assets or Property of the Company or any Subsidiary (other
than the proceeds thereof and accessions and upgrades thereto) and (3) such
Liens shall attach to such Property within 120 days of the date of the
completion of the construction or acquisition of such Property; (j) Liens
securing Capital Lease Obligations, PROVIDED that such Liens secure Capital
Lease Obligations which, when combined with (1) the outstanding secured
Indebtedness of the Company and it Subsidiaries (other than Indebtedness secured
by Liens described under clauses (b) and (i) hereof) and (2) the aggregate
amount of all other Capital Lease Obligations of the Company and Subsidiaries,
does not exceed 10% of the Company's Consolidated Net Tangible Assets; (k) Liens
to secure any extension, renewal, refinancing or refunding (or successive
extensions, renewals, refinancings or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in the foregoing clauses (a), (b), (c)
and (d), PROVIDED that such Liens do not extend to any other Property of the
Company or any Subsidiary (other than the proceeds thereof and accessions and
upgrades thereto) and the principal
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amount of the Indebtedness secured by such Liens is not increased; (1) any
charter or lease of drilling rigs in the ordinary of course of business; (m)
leases or subleases of real property to other Persons in the ordinary course of
business; (n) Liens securing Non-Recourse Indebtedness; (o) Liens securing
Permitted Indebtedness described in clause (b) of the definitions thereof; (p)
judgment liens not giving rise to an Event of Default so long as any appropriate
legal proceedings which may have been only initiated for the review of such
judgment shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired; and (q) rights of set-off of
banks and other Persons.
"Permitted Non-Recourse Subsidiary Refinancing Indebtedness" means
Non-Recourse Indebtedness of any Non-Recourse Subsidiary, incurred in exchange
for, or the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Non-Recourse Indebtedness of such Subsidiary which
outstanding Non-Recourse Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of this Indenture.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the Company,
which outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of this Indenture (excluding any Permitted
Indebtedness), PROVIDED that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is PARI PASSU with or subordinated in right
of payment to the Notes, then such new Indebtedness is PARI PASSU with or
subordinated in right of payment (without regard to its being secured) to, as
the case may be, the Notes at least to the same extent as the Indebtedness being
renewed, extended, refinanced refunded or repurchased, (ii) such new
Indebtedness is scheduled to mature later than the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (iii) such new Indebtedness has
an Average Life at the time such Indebtedness is incurred that is greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, and (iv) such new Indebtedness is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of
any Subsidiary (other than a Non-Recourse Subsidiary) incurred in exchange for,
or the net proceeds of which are used to renew, extend, refinance, refund or
repurchase outstanding Indebtedness of such Subsidiary, which outstanding
Indebtedness was incurred in accordance with, or is otherwise permitted by, the
terms of this Indenture, PROVIDED that (i) such new Indebtedness is scheduled to
mature later than the Indebtedness being renewed, extended, refinanced, refunded
or repurchased, (ii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iii) such new Indebtedness is in an aggregate principal amount (or, if such
indebtedness is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom
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<PAGE>
is) not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an underwritten public offering of
Common Stock for cash by the Company pursuant to a registration statement that
has been declared effective by the Commission (other than a registration
statement on Form S-8 or any successor form or otherwise relating to equity
securities issuable under any employee benefit plan of the Company).
"Redeemable Stock" means, with respect to any Person, any equity
security that by its terms or otherwise is required to be redeemed, or is
redeemable at the option of the holder thereof, at any time prior to one year
following the Stated Maturity of the Notes or is exchangeable into Indebtedness
of such Person or any of its subsidiaries.
"Related Business" means any business related, ancillary or
complementary to the business of the Company and its Subsidiaries on the Issue
Date.
"Replacement Asset" means a Property or asset that, as determined by
the Board of Directors of the Company as evidenced by a Board Resolution, is
used or is useful in a Related Business.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or
make any distribution in respect of, or purchase, redeem, retire or otherwise
acquire for value any Capital Stock of the Company or any Affiliate of the
Company, or warrants, rights or options to acquire such Capital Stock, other
than (x) dividends payable solely in the Capital Stock (other than Redeemable
Stock) of the Company or such Affiliate, as the case may be, or in warrants,
rights or options to acquire such Capital Stock and (y) dividends or
distributions by a Subsidiary to the Company or to a Wholly Owned Subsidiary;
(ii) make any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value, prior to any scheduled principal payment, scheduled
sinking fund payment or other stated maturity, Indebtedness of the Company or
any Subsidiary which is subordinated in right of payment to the Notes; or (iii)
make any Restricted Investment in any Person.
"Sale and Lease-Back Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a subsidiary of such
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<PAGE>
Person and is thereafter leased back from the purchaser or transferee thereof by
such Person or one of its subsidiaries.
"Senior Debt" means any Indebtedness incurred by the Company, unless
the instrument under which such Indebtedness is incurred expressly provides that
it is subordinated in right of payment to the Notes, PROVIDED that Senior Debt
will not include (a) any liability for federal, state, local or other taxes owed
or owing, (b) any Indebtedness owing to any Subsidiaries of the Company, (c) any
trade payables or (d) any Indebtedness that is incurred in violation of this
Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act of 1933, as amended, as such
Regulation is in effect on the date hereof.
"Stated Maturity," when used with respect to a Note or any installment
of interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or
any Subsidiary Guarantor that is subordinated in right of payment to the Notes
or the Subsidiary Guarantees, as the case may be, and does not mature prior to
one year following the Stated Maturity of the Notes.
The term "subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries or
such Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such Person
and (iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Subsidiary" means a subsidiary of the Company other than a
Non-Recourse Subsidiary.
"Subsidiary Guarantee" means any guarantee of the Notes by any
Subsidiary Guarantor in accordance with the provisions described under Article
Fourteen hereof.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries, if
any, executing this Indenture and (ii) any Person that becomes a successor
guarantor of the Notes in compliance with the provisions described under Article
Fourteen hereof.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation
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by the United States of America, which, in either case under clauses (i) or (ii)
above, are not callable or redeemable at the option of the issuer thereof; or
(iii) depository receipts issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligations or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt, PROVIDED that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation evidenced by such depository receipt.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Capital Stock or other ownership interests in such Subsidiary, other than
any director's qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Subsidiary to transact business in such foreign jurisdiction,
provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interest in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the economic
benefits of ownership of such Subsidiary to substantially the same extent as if
such Subsidiary were a wholly owned Subsidiary.
SECTION 1.2. The Original Indenture is supplemented with respect to the
Notes by inserting the following provision in Article Four:
Section 405. DEFEASANCE OF SUBSIDIARY GUARANTEES. The Company
may, at its option, elect (a) to have all of the obligations of the
Subsidiary Guarantors discharged with respect to the Notes and any
Subsidiary Guarantees (except for certain obligations to register the
transfer or exchange of Notes, replace stolen, lost or mutilated Notes
or maintain paying agencies and hold moneys for payment in trust) or
(b) to have their obligations released with respect to certain
restrictive covenants of this Indenture and to have certain Events of
Default no longer constitute Events of Default with respect to any
Notes, by complying with the provisions of this Article Four.
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE.
Section 501 of the Original Indenture is supplemented with respect to the Notes
by adding the following provisions (8)-(14) below:
(8) the Company fails to comply with any of its covenants or
agreements contained in Section 801 hereof or fails to make a Change of
Control Offer in
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accordance with Section 1017 hereof or an Asset Sale Offer in
accordance with Section 1013 hereof;
(9) default in the performance or breach of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Notes, any Subsidiary Guarantee or this Indenture (other than a
covenant or agreement a default in performance or breach of which is
specifically dealt with) and continuance of such default or breach for
a period of 30 days after written notice thereof has been mailed, by
registered or certified mail, to the Company or such Subsidiary
Guarantor by the Trustee or to the Company and the Trustee by the
Holders of at least 25% of the aggregate principal amount of the
outstanding Notes;
(10) Indebtedness of the Company or any Subsidiary (other than
Non-Recourse Indebtedness or Limited Recourse Indebtedness) is not paid
when due within the applicable grace period or is accelerated by the
holders thereof and, in either case, the aggregate principal amount of
such due and unpaid or accelerated Indebtedness exceeds $ 10 million;
(11) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of any Subsidiary (other
than a Non-Recourse Subsidiary) that constitutes a Significant
Subsidiary or any group of Subsidiaries (other than Non-Recourse
Subsidiaries) that, taken together, would constitute a Significant
Subsidiary, in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging such Subsidiary or
Subsidiaries a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of such Subsidiary or Subsidiaries under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of such Subsidiary or Subsidiaries or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 90
consecutive days; or
(12) the commencement by any Subsidiary (other than a
Non-Recourse Subsidiary) that constitutes a Significant Subsidiary or
any group of Subsidiaries (other than Non-Recourse Subsidiaries) that,
taken together, would constitute a Significant Subsidiary, of a
voluntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or of any
other case of proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of such Subsidiary or Subsidiaries in an involuntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against such
Subsidiary or Subsidiaries, or the filing by such Subsidiary or
Subsidiaries, of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the
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consent by such Subsidiary or Subsidiaries to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of such Subsidiary or Subsidiaries or of any substantial part
of the property of such Subsidiary or Subsidiaries, or the making by
such Subsidiary or Subsidiaries of an assignment for the benefit of
creditors, or the admission by such Subsidiary or Subsidiaries in
writing of the inability of such Subsidiary or Subsidiaries to pay the
debts of such Subsidiary or Subsidiaries generally as they become due,
or the taking of corporate action by such Subsidiary or Subsidiaries in
furtherance of any such action; or
(13) the entry by a court of competent jurisdiction of one or
more judgments or orders against the Company or any Subsidiary (other
than a Non-Recourse Subsidiary) in an uninsured or unindemnified
aggregate amount in excess of $10 million which remain undischarged or
unsatisfied for a period of 60 consecutive days after the right to
appeal them has expired; or
(14) any Subsidiary Guarantee shall for any reason cease to
be, or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the
release of any such Subsidiary Guarantee in accordance with this
Indenture).
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE.
Section 801 of the Original Indenture is superseded with respect to the Notes by
the following provisions:
Section 801. The Company will not, in any transaction or
series of transactions, consolidate with or merge into any other Person
(other than a merger of a Subsidiary into the Company in which the
Company is the continuing corporation), or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the
Property and assets of the Company and the Subsidiaries, taken as a
whole, to any Person, unless
(i) either (a) the Company shall be the continuing
corporation or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company is
merged, or the Person which acquires, by sale, assignment,
conveyance, transfer, lease or other disposition, all or
substantially all of the Property and assets of the Company
and the Subsidiaries, taken as a whole (such corporation or
Person, the "Surviving Entity"), shall be a corporation
organized and validly existing under the laws of the United
States of America, any political subdivision thereof or any
state thereof or the District of Columbia, and shall expressly
assume, by a supplemental Indenture, the due and punctual
payment of the principal of (and premium, if any) and interest
on all the Notes and the performance of the Company's
covenants and obligations under this Indenture;
(ii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any
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Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), no Event of Default or Default shall have
occurred and be continuing or would result therefrom;
(iii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), the Company (or
the Surviving Entity if the Company is not continuing) shall
have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to
such transactions;
(iv) immediately after giving effect to any such
transaction or series of transactions on a pro forma basis as
if such transaction or series of transactions had occurred on
the first day of the Determination Period, the Company (or the
Surviving Entity if the Company is not continuing) would be
permitted to incur $1.00 of additional Indebtedness pursuant
to the tests described in the first sentence under the caption
Section 1010 hereof; and
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE.
(a) Section 901 of the Original Indenture is supplemented with respect
to the Notes by inserting the following provisions at the end of Section 901:
(9) to provide for uncertificated Notes in addition to or in
place of certificated Notes; or
(10) to add or, except as provided in Article IV or Section
1404, release any Subsidiary Guarantor pursuant to the terms of this
Indenture, PROVIDED that such actions will not adversely affect the
interests of the Holders in any material respect.
(b) Section 902 of the Original Indenture is supplemented with respect
to the Notes by inserting the following provisions:
(4) modify the obligations of the Company to make a Change of
Control Offer pursuant to Section 1017 hereof or an Asset Sale Offer
pursuant to Section 1013 hereof; or
(5) subordinate in right of payment, or otherwise subordinate,
the Notes to any other Indebtedness.
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE.
Article 10 of the Original Indenture is supplemented with respect to the Notes
by inserting the following sections at the end thereof:
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Section 1008. TRANSACTIONS WITH AFFILIATES. Subsequent to the
Issue Date, the Company will not, and will not permit any Subsidiary
to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions, including, but not
limited to, the purchase, sale or exchange of Property, the making of
any Investment, the giving of any guarantee or the rendering of any
service with any Affiliate of the Company (other than transactions
among the Company and any Wholly Owned Subsidiaries) unless (i) such
transaction or series of related transactions is on terms no less
favorable to the Company or such Subsidiary than those that could be
obtained in a comparable arm's length transaction with a Person that is
not such an Affiliate and (ii) (a) with respect to a transaction or
series of related transactions that has a Fair Market Value in excess
of $2 million but less than $5 million, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction
or series of related transactions complies with clause (i) above and
(b) with respect to a transaction or series of related transactions
that has a Fair Market Value equal to or in excess of $5 million, the
transaction or series of related transactions is approved by a majority
of the Board of Directors of the Company (including a majority of the
disinterested directors), which approval is set forth in a Board
Resolution certifying that such transaction or series of transactions
complies with clause (i) above. The foregoing provisions shall not be
applicable to (i) reasonable compensation, indemnification and other
benefits paid or made available to an officer, director or employee of
the Company or a Subsidiary for services rendered in such person's
capacity as an officer, director or employee (including reimbursement
or advancement of reasonable out-of-pocket expenses and provisions of
directors' and officers' liability insurance) or (ii) the making of any
Restricted Payment otherwise permitted by this Indenture.
Section 1009. LIMITATION ON RESTRICTED PAYMENTS. The Company
will not, and will not permit any Subsidiary (other than Non-Recourse
Subsidiaries) to, make any Restricted Payment, unless at the time of
and after giving effect to the proposed Restricted Payment (a) no
Default shall have occurred and be continuing (or would result
therefrom), (b) the Company could incur at least $1.00 of additional
Indebtedness under the tests described in the first sentence under
Section 1010 hereof and (c) the aggregate amount of all Restricted
Payments declared or made on or after the Issue Date by the Company or
any Subsidiary (other than Non-Recourse Subsidiaries) shall not exceed
the sum of (i) 50% (or if such Consolidated Net Income shall be a
deficit, minus 100% of such deficit) of the aggregate Consolidated Net
Income accrued during the period beginning on the first day of the
fiscal quarter in which the Issue Date falls and ending on the last day
of the fiscal quarter ending immediately prior to the date of such
proposed Restricted Payment, plus (ii) an amount equal to the aggregate
net cash proceeds received by the Company, subsequent to the Issue
Date, from the issuance or sale (other than to a Subsidiary) of shares
of its Capital Stock (excluding Redeemable Stock and the net proceeds
from the Common Stock Offering), but including Capital Stock issued
upon the exercise of options, warrants or rights to purchase
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Capital Stock (other than Redeemable Stock) of the Company) and the
liability (expressed as a positive number) in accordance with GAAP in
respect of any Indebtedness of the Company or carrying value of
Redeemable Stock, which has been converted into, exchanged for or
satisfied by the issuance of shares of Capital Stock (other than
Redeemable Stock) of the Company, subsequent to the Issue Date plus
(iii) to the extent not otherwise included in Consolidated Net Income,
the net reduction in Investments in Non-Recourse Subsidiaries resulting
from dividends, repayments of loans or advances, or other transfers of
assets, in each case to the Company or a Subsidiary after the Issue
Date from any Non-Recourse Subsidiary or from the redesignation of a
Non-Recourse Subsidiary as a Subsidiary (valued in each case as
provided in the definition of Investment), not to exceed in the case of
any Non-Recourse Subsidiary the total amount of Investments (other than
Permitted Investments) in such Non-Recourse Subsidiary made by the
Company and its Subsidiaries in such Non-Recourse Subsidiary after the
Issue Date, plus (iv) $50 million minus the sum of Investments
described in clauses (k) and (1) under the definition of "Permitted
Investments," but in no event to exceed $10 million.
The foregoing provisions will not prevent (A) the payment of
any dividend on Capital Stock of any class within 60 days after the
date of its declaration if at the date of declaration such payment
would be permitted by this Indenture; (B) any repurchase or redemption
of Capital Stock or Subordinated Indebtedness of the Company made by
exchange for Capital Stock of the Company (other than Redeemable
Stock), or out of the net cash proceeds from the substantially
concurrent issuance or sale (other than to a Subsidiary) of Capital
Stock of the Company (other than Redeemable Stock), PROVIDED that the
net cash proceeds from such sale are excluded from computations under
clause (c)(ii) above to the extent such proceeds are applied to
purchase or redeem such Capital Stock or Subordinated Indebtedness; and
(C) any repurchase or redemption of Subordinated Indebtedness of the
Company solely in exchange for, or out of the net cash proceeds from
the substantially concurrent sale of, new Subordinated Indebtedness of
the Company, so long as such Subordinated Indebtedness (x) is
subordinated to the Notes at least to the same extent as the
Subordinated Indebtedness so exchanged, purchased or redeemed, (y) has
a stated maturity later than the stated maturity of the Subordinated
Indebtedness so exchanged, purchased or redeemed and (z) has an Average
Life at the time incurred that is greater than the remaining Average
Life of the Subordinated Indebtedness so exchanged, purchased or
redeemed. Restricted Payments permitted to be made as described in the
preceding sentence will be excluded in calculating the amount of
Restricted Payments thereafter, except such Restricted Payments made as
described in clause (A), which will be included in calculating the
amount of Restricted Payments thereafter.
Section 1010. LIMITATION ON INDEBTEDNESS. The Company will
not, and will not permit any Subsidiary to, directly or indirectly,
create, incur, assume, suffer to exist, guarantee or otherwise become
liable, with respect to the payment of (collectively, "incur"), any
Indebtedness (other than Non-Recourse Indebtedness),
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unless after giving pro forma effect to the incurrence of such
Indebtedness, the Consolidated Interest Coverage Ratio for the
Determination Period preceding the Transaction Date is at least 2.5 to
1.0. Notwithstanding the foregoing, the Company or any Subsidiary may
incur Permitted Indebtedness. Any Indebtedness of a Person existing at
the time such Person became a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time it becomes a Subsidiary.
Section 1011. LIMITATION ON SUBSIDIARY INDEBTEDNESS AND
PREFERRED STOCK. The Company will not permit any Subsidiary to incur,
directly or indirectly, any Indebtedness (other than Indebtedness of
Non-Recourse Subsidiaries) or issue any preferred stock except:
(a) Indebtedness or preferred stock issued to and
held by the Company or a Wholly Owned Subsidiary, so long as
any transfer of such Indebtedness or preferred stock to a
Person other than the Company or a Wholly Owned Subsidiary
will be deemed to constitute the issuance of such Indebtedness
or preferred stock by the issuer thereof;
(b) Indebtedness or preferred stock of a Subsidiary
issued and outstanding prior to the date on which such
Subsidiary was acquired by the Company (other than
Indebtedness or preferred stock issued in connection with or
in anticipation of such acquisition);
(c) Indebtedness or preferred stock outstanding on
the Issue Date;
(d) Indebtedness described in clauses (b), (c), (d),
(f) and (g) under the definition of "Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of
such Subsidiary;
(f) Preferred stock issued in exchange for, or the
proceeds of which are used to refinance, repurchase or redeem,
Indebtedness or preferred stock described in clauses (b) and
(c) of this paragraph (the Retired Indebtedness or Stock),
PROVIDED that the preferred stock so issued has (i) a
liquidation value not in excess of the principal amount or
liquidation value of the Retired Indebtedness or Stock plus
related expenses for redemption and issuance and (ii) a
redemption date later than the stated maturity or redemption
date (if any) of the Retired Indebtedness or Stock;
(g) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another
Subsidiary (other than Non-Recourse Indebtedness) in
connection with a merger of such
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Subsidiaries, PROVIDED that no Subsidiary or any successor (by
way of merger) thereto existing on the Issue Date shall assume
or otherwise become responsible for any Indebtedness of an
entity which is not a Subsidiary on the Issue Date, except to
the extent that a Subsidiary would be permitted to incur such
Indebtedness under tills paragraph; and
(h) Indebtedness of any Subsidiary, which when taken
together with all other Indebtedness of the Subsidiaries
(except Indebtedness incurred pursuant to clauses (a), (b) and
(d) of this covenant), does not exceed at any one time
outstanding the greater of (i) $230 million and (ii) 15% of
Consolidated Net Tangible Assets determined as of the date of
incurrence of such Indebtedness.
Section 1012. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not
permit any Subsidiary (other than a Non-Recourse Subsidiary) to,
directly or indirectly, create, enter into any agreement with any
Person or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind which by its terms
restricts the ability of any Subsidiary (other than a Non-Recourse
Subsidiary) to (a) pay dividends, in cash or otherwise, or make any
other distributions on its Capital Stock to the Company or any
Subsidiary (other than a Non-Recourse Subsidiary), (b) pay any
Indebtedness owed to the Company or any Subsidiary (other than a
Non-Recourse Subsidiary), (c) make loans or advances to the Company or
any Subsidiary (other than a Non-Recourse Subsidiary) or (d) transfer
any of its Property or assets to the Company or any Subsidiary (other
than a NonRecourse Subsidiary) except any encumbrance or restriction
contained in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or asset acquired after
the Issue Date, so long as such encumbrance or restriction
relates only to the Property or asset so acquired;
(iii) relating to any Indebtedness of any Subsidiary
at the date on which such Subsidiary was acquired by the
Company or any Subsidiary (other than Indebtedness incurred in
anticipation of such acquisition);
(iv) effecting a refinancing of Indebtedness issued
pursuant to an agreement referred to in the foregoing clauses
(i) through (iii), so long as the encumbrances and
restrictions contained in any such refinancing agreement are
no more restrictive than the encumbrances and restrictions
contained in such agreements;
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(v) which constitute customary provisions restricting
subletting or assignment of any lease of the Company or any
Subsidiary or provisions in agreements that restrict the
assignment of such agreement or any rights hereunder; and
(vi) which constitute restrictions on the sale or
other disposition of any Property securing Indebtedness as a
result of a Permitted Lien on such Property.
Section 1013. LIMITATION ON ASSET SALES. The Company will not
engage in, and will not permit any Subsidiary to engage in, any Asset
Sale unless (a) except in the case of (i) an Asset Sale resulting from
the requisition of tide to, seizure or forfeiture of any Property or
assets or any actual or constructive total loss or an agreed or
compromised total loss or (ii) a Bargain Purchase Contract, the Company
or such Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value of the
Property; (b) except in the case of an Asset Sale described in clause
(a), at least 75% of such consideration consists of Cash Proceeds (or
the assumption of Indebtedness of the Company or such Subsidiary
relating to the Capital Stock or Property that was the subject of such
Asset Sale and the release of the Company or such Subsidiary from
Indebtedness); (c) after giving effect to such Asset Sale, the total
non-cash consideration held by the Company from all such Asset Sales
does not exceed $10 million, and (d) the Company delivers to the
Trustee an Officers' Certificate, which Officers' Certificate shall be
conclusive, certifying that such Asset Sale complies with clauses (a),
(b) and (c); PROVIDED, HOWEVER, that the requirement set forth in
clause (b) shall not apply to an Asset Sale in which the Company
exchanges (a "Permitted Exchange") assets for assets that constitute
Replacement Assets. The Company or such Subsidiary, as the case may be,
may apply the Net Available Proceeds from each Asset Sale (x) to the
acquisition of one or more Replacement Assets, or (y) to repurchase or
repay Senior Debt (with a permanent reduction of availability in the
case of revolving credit borrowings); PROVIDED, HOWEVER, that such
acquisition or such repurchase or repayment shall be made within 365
days after the consummation of the relevant Asset Sale.
Any Net Available Proceeds from any Asset Sale that are not
used to so acquire Replacement Assets or to repurchase or repay Senior
Debt within 365 days after consummation of the relevant Asset Sale
constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10 million, the Company shall, or at any time after
receipt of Excess Proceeds, the Company may, at its option, make a pro
rata offer (an "Asset Sale Offer") to purchase from all Holders an
aggregate principal amount of Notes equal to the Excess Proceeds, at a
price in cash equal to 100% of the outstanding principal amount thereof
plus accrued interest, if any, to the purchase date, in accordance with
the procedures set forth in this Indenture. Upon completion of such
Asset Sale Offer, the amount of Excess
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Proceeds shall be reset to zero and the Company may use any remaining
amount for general corporate purposes.
The Company will comply with any applicable tender offer rules
(including, without limitation, any applicable requirements of Rule
14e-1 under the Exchange Act) in the event that an Asset Sale Offer is
required under the circumstances described herein.
Section 1014. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to any Sale and Lease-Back Transaction (other than a Sale
and Lease-Back Transaction between NonRecourse Subsidiaries) unless (i)
the proceeds from such Sale and Lease-Back Transaction are at least
equal to the Fair Market Value of such Property being transferred and
(ii) the Company or such Subsidiary would have been permitted to enter
into such transaction under the tests described under Sections 1010,
1011 and 1015 hereof.
Section 1015. LIMITATION ON LIENS. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, create,
affirm, incur, assume or suffer to exist any Liens on or with respect
to any Property of the Company or such Subsidiary or any interest
therein or any income or profits therefrom, whether owned at the Issue
Date or thereafter acquired, without effectively providing that the
Notes shall be secured equally and ratably with (or prior to) the
Indebtedness so secured, other than Permitted Liens.
Section 1016. LIMITATION ON NON-GUARANTOR SUBSIDIARIES. The
Company will not permit any Subsidiary that is not a Subsidiary
Guarantor to guarantee the payment of any Indebtedness of the Company
unless: (i)(A) such Subsidiary simultaneously executes and delivers a
supplemental Indenture to this Indenture providing for a Subsidiary
Guarantee of the Notes by such Subsidiary and (B), with respect to any
guarantee of Subordinated Indebtedness by a Subsidiary, any such
guarantee shall be subordinated to such Subsidiary's Subsidiary
Guarantee at least to the same extent as such Subordinated Indebtedness
is subordinated to the Notes; (ii) such Subsidiary waives, and agrees
not in any manner whatsoever to exercise any right or claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other
Subsidiary as a result of any payment by such Subsidiary under its
Subsidiary Guarantee until such time as the obligations guaranteed
thereby are paid in full; and (iii) such Subsidiary shall deliver to
the Trustee an opinion of independent legal counsel to the effect that
such Subsidiary Guarantee has been duly executed and authorized and
constitutes a valid, binding and enforceable obligation of such
Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation,
all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general
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<PAGE>
principles of equity; PROVIDED that this covenant shall not be
applicable to any guarantee of any Subsidiary that (x) existed at the
time such Person became a Subsidiary of the Company and (y) was not
incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Company. Further, a pledge of assets to
secure any Indebtedness for which the pledgor is not otherwise liable
shall not be considered a guarantee.
Section 1017. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a)
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below (the "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any,
thereon to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company shall mail
a notice to the Trustee and each Holder stating: (1) that the Change of
Control Offer is being made pursuant to this Section 1017 and that all
Notes tendered shall be accepted for payment; (2) the purchase price
and the purchase date described below (the "Change of Control Payment
Date"); (3) that any Note not tendered shall continue to accrue
interest; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest, if any,
after the Change of Control Payment Date; (5) that Holders electing to
have any Notes purchased pursuant to a Change of Control Offer shall be
required to surrender the Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes completed, to the
Paying Agent at the address specified in the notice prior to the close
of business on the fifth Business Day preceding the Change of Control
Payment Date; (6) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and (7) that Holders whose
Notes are being purchased only in part shall be issued new Notes equal
in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. If any of the Notes
subject to a Change of Control Offer is in the form of a Global
Certificate, then such notice shall be modified in form but not
substance to the extent appropriate to accord with the procedures of
the Depository applicable to repurchases. The Change of Control Offer
shall remain open for at least 20 Business Days and until the close of
business on the fifth Business Day prior to the Change of Control
Payment Date. The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result
of a Change of Control.
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<PAGE>
(b) On a date that is no earlier than 30 days nor later than
60 days from the date that the Company mails or causes to be mailed
notice of the Change of Control to the Holders (the "Change of Control
Payment Date"), the Company shall, to the extent lawful, (i) accept for
payment all Notes or portions thereof properly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered
to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly
mail or deliver to each Holder of Notes so tendered the Change of
Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new
Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are
applicable.
The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Section 1017 and purchases all
Notes validly tendered and not withdrawn under such Change of Control
Offer.
Section 1018. REPORTS. The Company and any Subsidiary
Guarantors shall file with the Commission, to the extent such filings
are accepted by the Commission and whether or not the Company has a
class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company and the
Subsidiary Guarantors would be required to file if the Company were
subject to Section 13 or 15 of the Exchange Act, in each case on or
before the dates on which such reports and other documents would have
been required to have been filed with the Commission if the Company had
been subject to Section 13 or 15 of the Exchange Act, beginning with
the Company's fiscal year ended December 31, 1997. The Company shall
also (i) file with the Trustee (with exhibits), and provide to each
Holder of Notes (without exhibits), without cost to such Holder, copies
of such reports and documents within 15 days after the date on which
the Company files such reports and documents with the Commission or the
date on which the Company would be required to file such reports and
documents if the Company were so required and (ii) if filing such
reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, supply at the
Company's cost copies of such reports and documents (including any
exhibits thereto) to any Holder of Notes promptly upon written request.
The Company shall at all times comply with Trust Indenture Act ss.
314(a).
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<PAGE>
Section 1019. TAXES. The Company shall pay, and shall cause
each of its Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except such as are
contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 1020. STAY, EXTENSION AND USURY LAWS. Each of the
Company and the Subsidiary Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of
this Indenture; and each of the Company and the Subsidiary Guarantors
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE.
Article Eleven of the Original Indenture is supplemented with respect to the
Notes by inserting the following section at the end thereof:
Section 1109. OPTIONAL REDEMPTION. The Notes will not be
redeemable at the option of the Company prior to May 1, 2002. On or
after such date, the Notes will be redeemable at the option of the
Company, in whole at any time or in part from time to time, at the
following prices (expressed in percentages of the principal amount), if
redeemed during the 12 months beginning May 1 of the years indicated
below, in each case together with interest accrued to the redemption
date (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date):
YEAR PERCENTAGE
---- ----------
2002................................................. 104.688%
2003................................................. 103.125%
2004................................................. 101.563%
2005 and thereafter.................................. 100.000%
(b) If fewer than all the Notes are redeemed, selection for
redemption will be made by the Trustee, by lot or by any other means
the Trustee determines to be fair and appropriate.
(c) Notwithstanding the foregoing, at any time on or prior to
May 1, 2000, the Company may redeem up to an aggregate of $108,333,000
principal amount of Notes at a redemption price of 109.375% of the
principal amount thereof, plus accrued and unpaid interest thereon to
the redemption date, with the net proceeds of a Public Equity Offering
(other than the Common Stock Offering
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<PAGE>
concurrently with the date of original issuance of the Notes), PROVIDED
that at least $216,667,000 in aggregate principal amount of Notes
remain outstanding immediately after the occurrence of such redemption
and PROVIDED, FURTHER, that such redemption occurs within 60 days of
the date of the closing of such Public Equity Offering.
SECTION 1.8. NEW ARTICLE FOURTEEN. The Original Indenture is
supplemented with respect to the Notes by inserting the following Article
Fourteen:
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
Section 1401. SUBSIDIARY GUARANTEES. Each Subsidiary
Guarantor, jointly and severally, shall unconditionally guarantee to
each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and their respective successors and assigns, irrespective
of the validity and enforceability of this Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that: (a) the
principal of and premium and interest on the Notes shall be promptly
paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on
premium and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such
other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Subsidiary Guarantors shall be
jointly and severally obligated to pay the same immediately. The
Subsidiary Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and
covenants that this Subsidiary Guarantee shall not be discharged (other
than in accordance with Section 1404 of the Indenture) except by
complete performance of the obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or Subsidiary Guarantors, or any
custodian, trustee, liquidator or other similar official acting in
relation to either the Company or Subsidiary Guarantors, any amount
paid by either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and
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<PAGE>
effect. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Five for
the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby and (y) in the event of any
declaration of acceleration of such obligations as provided in Article
Five, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee. In order to provide for just and equitable
contribution among the Subsidiary Guarantors, in the event any payment
or distribution is made by any Subsidiary Guarantor (a "Funding
Subsidiary Guarantor") under its Subsidiary Guarantee, such Funding
Subsidiary Guarantor shall be entitled to a contribution from each
other Subsidiary Guarantor in a pro rata amount based on the Adjusted
Net Assets of each Subsidiary Guarantor (including the Funding
Subsidiary Guarantor) for all payments, damages and expenses incurred
by the Funding Subsidiary Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to any Subsidiary Guarantee. Each
Subsidiary Guarantor agrees that it will not be entitled to exercise
any right of subrogation or contribution in relation to the Holders of
Notes in respect of any obligations guaranteed hereby until payment in
full of all amounts guaranteed under this Section 1401.
Section 1402. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
To evidence its Subsidiary Guarantee set forth in Section 1401, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit B to the First
Supplemental Indenture shall be endorsed by an Officer of such
Subsidiary Guarantor on each Note thereafter authenticated and
delivered by the Trustee, that a supplement to this Indenture shall be
executed on behalf of such Subsidiary Guarantor by its duly authorized
officer in accordance with Section 1016 hereof and that such Subsidiary
Guarantor shall deliver to the Trustee an Opinion of Counsel that the
foregoing have been duly authorized, executed and delivered by such
Subsidiary Guarantor and that such Subsidiary Guarantor's Subsidiary
Guarantee is a valid and legally binding obligation of such Subsidiary
Guarantor, enforceable against such Subsidiary Guarantor in accordance
with its terms, subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance and other law affecting the rights of creditors
generally.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 1401 shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation
of such Subsidiary Guarantee.
If an Officer whose signature is on a supplement to this
Indenture or on the notation of Subsidiary Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a
notation of Subsidiary Guarantee is endorsed, the Subsidiary Guarantee
shall be valid nevertheless.
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<PAGE>
The delivery of any Note by the Trustee, after the
authentication thereof hereunder and whether upon original issue,
registration of transfer, exchange or otherwise, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on
behalf of each Person that is then a Subsidiary Guarantor.
Section 1403. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS. No Subsidiary Guarantor may consolidate with or merge
with or into (whether or not such Subsidiary Guarantor is the surviving
Person), another Person whether or not affiliated with such Subsidiary
Guarantor unless:
(a) subject to the provisions of Section 1404 hereof,
the Person formed by or surviving any such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all
the obligations of such Subsidiary Guarantor, pursuant to a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee in respect of the Notes, this
Indenture and such Subsidiary Guarantor's Subsidiary
Guarantee;
(b) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(c) such transaction does not violate any of Sections
1008, 1009, 1010, 1011, 1012, 1014, 1015, 1016, 1017, 1018,
1019 and 1020.
Notwithstanding the foregoing, no Subsidiary Guarantor shall
be permitted to consolidate with or merge with or into (whether or not
such Subsidiary Guarantor is the surviving Person), another Person
pursuant to the preceding sentence if such consolidation or merger
would not be permitted by Article Eight hereof.
In case of any such consolidation or merger and upon the
assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee,
of the obligations of the Subsidiary Guarantor in respect of the Notes,
this Indenture and such Subsidiary Guarantor's Subsidiary Guarantee,
such successor corporation shall succeed to and be substituted for the
Subsidiary Guarantor with the same effect as if it had been named
herein as a Subsidiary Guarantor. Such successor Person thereupon may
cause to be signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee.
All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
Except as set forth in Articles Eight and Ten hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the
Company, or shall prevent any sale or
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<PAGE>
conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company.
Section 1404. RELEASES OF SUBSIDIARY GUARANTEES. In the event
of a sale or other disposition of all or substantially all of the
assets of any Subsidiary Guarantor to a Person that is not a Subsidiary
or a Non-Recourse Subsidiary in a transaction that does not violate any
provisions of this Indenture, by way of merger, consolidation or
otherwise, or a sale or other disposition (including, without
limitation, by foreclosure) of all of the capital stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a
sale or other disposition (including, without limitation, by
foreclosure), by way of such a merger, consolidation or otherwise, of
all of the capital stock of such Subsidiary Guarantor) or the Person
acquiring the property (in the event of a sale or other disposition of
all or substantially all of the assets of such Subsidiary Guarantor)
shall be released and relieved of any obligations under this Indenture
and its Subsidiary Guarantee; PROVIDED that the Net Available Proceeds
of such sale or other disposition are applied in accordance with
Section 1013 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in accordance with
the provisions of this Indenture, including without limitation Section
1013, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Subsidiary Guarantor from its
obligations under this Indenture and its Subsidiary Guarantee. In the
event of a release or discharge in full of all obligations of any
Subsidiary Guarantor in respect of all of its guarantees of
Indebtedness of the Company, such Subsidiary Guarantor shall, upon the
written request of the Company, be released and relieved of any
obligation under this Indenture and its Subsidiary Guarantee. Upon
delivery by the Company to the Trustee of an Officers' Certificate to
the effect that such Subsidiary Guarantor has been released or
discharged in full from all of its obligations under all of its
guarantees of Indebtedness of the Company, the Trustee shall execute
any documents reasonably required in order to evidence the release of
such Subsidiary Guarantor from its obligations under this Indenture and
its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations
under its Subsidiary Guarantee shall remain liable for the full amount
of principal of and premium and interest on the Notes and for the other
obligations of any Subsidiary Guarantor under this Indenture.
Any Subsidiary Guarantor that is designated a Non-Recourse
Subsidiary in accordance with the terms of this Indenture shall be
released from and relieved of its obligations under this Indenture and
its Subsidiary Guarantee. Any Non-Recourse Subsidiary that ceases to be
a Non-Recourse Subsidiary shall thereupon execute a supplement to this
Indenture in accordance with the terms of this Indenture.
Section 1405. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
For purposes hereof, each Subsidiary Guarantor's liability shall be
that amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be
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<PAGE>
limited to the lesser of (i) the aggregate amount of the obligations of
the Company under the Notes and this Indenture and (ii) the amount, if
any, which would not have (A) rendered such Subsidiary Guarantor
"insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it
with unreasonably small capital at the time its Subsidiary Guarantee of
the Notes was entered into, after giving effect to the incurrence of
existing Indebtedness immediately prior to such time; provided that, it
shall be a presumption in any lawsuit or other proceeding in which such
Subsidiary Guarantor is a party that the amount guaranteed pursuant to
its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Subsidiary
Guarantor, or debtor in possession or trustee in bankruptcy of such
Subsidiary Guarantor, otherwise proves in such a lawsuit that the
aggregate liability of such Subsidiary Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in
accordance with the previous sentence, the right of such Subsidiary
Guarantor to contribution from other Subsidiary Guarantors and any
other rights such Subsidiary Guarantor may have, contractual or
otherwise, shall be taken into account.
Section 1406. "TRUSTEE" TO INCLUDE PAYING AGENT. In case at
any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Fourteen shall in such case (unless
the context shall otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully and for all
intents and purposes as if such Paying Agent were named in this Article
Fourteen in place of the Trustee.
SECTION 1.9. EFFECT OF ARTICLE ONE. The supplements to the Original
Indenture set forth in Article One of this First Supplemental Indenture affect
only the provisions of the Original Indenture as such provisions relate to the
Notes, the series of Securities comprised of the Notes and the rights, remedies
and obligations of the Company, the Subsidiaries, the Holders of Notes, the
Trustee and other Persons set forth in the Original Indenture as such rights,
remedies and obligations relate to the Notes. Unless otherwise expressly set
forth in a subsequent supplement to the Original Indenture, as supplemented
hereby, the supplements to the Original Indenture contained in Article One of
this First Supplemental Indenture relate only to the series of Securities
comprised of the Notes.
ARTICLE TWO
THE NOTES
The Notes shall be issued in the form of one or more permanent global
Notes substantially in the form set forth on Exhibit A hereof, duly executed by
the Company and authenticated by the Trustee as provided in the Indenture. The
terms of the Notes set forth on Exhibit A hereto are incorporated by reference
herein as if set forth herein in their entirety.
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<PAGE>
ARTICLE THREE
REPRESENTATIONS OF THE COMPANY
SECTION 3.1. AUTHORITY OF THE COMPANY. The Company is duly authorized
to execute and deliver this First Supplemental Indenture, and all corporate
action on its part required for the execution and delivery of this Supplemental
Indenture has been duly and effectively taken.
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS. The Company warrants
that the recitals of fact and statements contained in this First Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE FOUR
CONCERNING THE TRUSTEE
SECTION 4.1. ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and conditions
set forth in the Original Indenture and in this First Supplemental Indenture, to
all of which the Company and the respective Holders of the Notes at any time
hereafter outstanding agree by their acceptance thereof.
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The
recitals and statements contained in this First Supplemental Indenture shall be
taken as the recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this First Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this First Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.1. RELATION TO THIS INDENTURE. The provisions of this First
Supplemental Indenture shall become effective immediately upon the execution and
delivery hereof. This First Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Original Indenture as fully
and with the same effect as if all such terms and provisions had been set forth
in the Original Indenture; PROVIDED, HOWEVER, such terms and provisions shall be
so included in this First Supplemental Indenture solely for the benefit of the
Company, the Subsidiary Guarantors the Trustee and the Holders of the Notes. The
Original Indenture is hereby ratified and confirmed and shall remain and
continue in full force and effect in accordance with the terms and provisions
thereof, as supplemented by this First Supplemental Indenture, and the Original
Indenture and this First Supplemental Indenture shall be read, taken and
construed together as one instrument.
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<PAGE>
SECTION 5.2. MEANING OF TERMS. Any term used in this First Supplemental
Indenture which is defined in the Original Indenture shall have the meaning
specified in the Original Indenture, unless the context shall otherwise require.
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE. This First
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
SECTION 5.4. GOVERNING LAW. This First Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, Pride Petroleum Services, Inc. has caused this
First Supplemental Indenture to be executed in its corporate name by a duly
authorized officer and The Chase Manhattan Bank has caused this Supplemental
Indenture to be executed in its corporate name by a duly authorized officer, all
as of the date first above written.
PRIDE PETROLEUM SERVICES, INC.
By:
Name:
Title:
THE CHASE MANHATTAN BANK
By:
Name:
Title:
<PAGE>
EXHIBIT A
(FACE OF NOTE)
9 3/85% Senior Notes due 2007
CUSIP Number______________
No. $325,000,000
PRIDE PETROLUEM SERVICES, INC.
promises to pay to
or registered assigns,
the Principal sum of
Dollars on May 1, 2007.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Dated: May ___, 1997
[SEAL]
ATTEST: PRIDE PETROLEUM SERVICES, INC.
By: By:
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
The Chase Manhattan Bank,
as Trustee
By:
Authorized Officer
A-1
<PAGE>
(BACK OF NOTE)
93/8% Senior Note due May ___, 2007
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. (a) Pride Petroleum Services, Inc., a Louisiana
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate of 93/8% per annum, which interest shall be payable in
cash semi-annually in arrears on May 1 and November 1, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"); PROVIDED that the first Interest Payment Date shall be November 1, 1997.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of original
issuance. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company will
pay interest to the Person who is the Holder of record of this Note as of the
close of business on the April 15 or October 15 immediately preceding such
Interest Payment Date, even if this Note is canceled after such record date and
on or before such Interest Payment Date. Principal, premium, if any, and
interest, if any, on this Note will be payable at the office or agency of the
Company maintained for such purpose within the City and State of New York. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Chase Manhattan Bank, the
Trustee under the Indenture, will act as Registrar and Paying Agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company, any Subsidiary Guarantor or any other of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of May 1, 1997, as supplemented by a First Supplemental Indenture of even date
(collectively, the "Indenture") between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture
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and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general unsecured obligations of the
Company limited in an aggregate principal amount to $325,000,000 and will mature
on May 1, 2007.
5. OPTIONAL REDEMPTION. (a) The Notes are not redeemable at the
Company's option prior to May 1, 2002. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month period
beginning on May 1 of the years indicated below:
YEAR PERCENTAGE
- ---- ----------
2002 .......................... 104.688%
2003 .......................... 103.125%
2004 .......................... 101.563%
2005 and thereafter ........... 100.000%
(b) Notwithstanding clause (a) of this Paragraph 5, prior to May 1,
2000, the Company may, at its option, on any one or more occasions, redeem up to
$108,333,000 in aggregate principal amount of Notes at a redemption price equal
to 109.375% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date, with the net proceeds of a Public Equity
Offering (other than the Common Stock offering concurrently with the date of
original issuance of the Notes); PROVIDED that at least $200.0 million in
aggregate principal amount of Notes must remain outstanding immediately after
the occurrence of such redemption; and provided, further, that any such
redemption shall occur within 60 days of the date of the closing of such Public
Equity Offering.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change
of Control, each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of purchase (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Company will mail a notice to each Holder and the
Trustee describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
the Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
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(b) If the Company or a Subsidiary consummates any Asset Sales
permitted by the Indenture, when the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company shall make an Asset Sale Offer to purchase the
maximum principal amount of Notes to which the Asset Sale Offer applies that may
be purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase, in accordance with the
procedures set forth in Section 1013 of the Indenture. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis, based on the
aggregate principal amount (or accreted value, as applicable) thereof
surrendered in such Asset Sale Offer. Upon the completion of an Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes initially issued are in
the form of a permanent Global Certificate, except as provided in this
Indenture. Under certain circumstances described in the Indenture, Notes may
also be issued in the form of permanent certificated Notes in registered form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes. Without
notice to or consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely
A-4
<PAGE>
affect the legal rights under the Indenture of any such Holder, or to comply
with the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to secure the
Notes or to add or release any Subsidiary Guarantor pursuant to the terms of the
Indenture; PROVIDED that such actions will not adversely affect the interests of
the Holders in any material respect.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on the Notes; (ii) default in
payment when due of the principal of or premium, if any, on the Notes; (iii)
failure by the Company to comply with the provisions of Sections 801, 1013 and
1017 of the Indenture; (iv) failure by the Company or any Subsidiary Guarantor
for 30 days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply with any of
its other agreements in the Indenture or the Notes; (v) any Subsidiary Guarantee
shall for any reason cease to be, or be asserted by the Company or any
Subsidiary Guarantor, as applicable, not to be, in full force and effect (except
pursuant to the release of any such Subsidiary Guarantee in accordance with the
Indenture); (vi) failure by the Company or any of its Subsidiaries (other than
Non-Recourse Subsidiaries) to pay Indebtedness of the Company or any Subsidiary
(other than Non-Recourse Indebtedness or Limited Recourse Indebtedness) when due
within the applicable grace period, which Indebtedness exceeds $10 million;
(vii) the entry of a judgment in an uninsured or underdemnified aggregate amount
in excess of $10.0 million, which judgment is not paid or discharged for a
period of 60 days; and (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries (other than NonRecourse
Subsidiaries) that constitute a Significant Subsidiary or any group of
Subsidiaries (other than Non-Recourse Subsidiaries) that, taken together, would
constitute a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company, any Subsidiary (other than a Non-Recourse Subsidiary) that constitutes
a Significant Subsidiary or any group of Subsidiaries (other than NonRecourse
Subsidiaries) that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to deliver
to the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required, upon becoming aware of any Default or Event of Default,
to deliver to the Trustee a statement specifying such Default or Event of
Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or
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otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes, by accepting a Note, waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. SINKING FUND; ADDITIONAL AMOUNTS. There shall not be any sinking
fund with respect to the Notes. The Company shall not be obligated to pay
Additional Amounts with respect to the Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Pride Petroleum Services, Inc.
1500 City West Blvd.
Suite 400
Houston, Texas 77042
Telephone No. (713) 789-1400
Telecopier No.
Attention: Robert Randall
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's Social Security or tax I.D. No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee: /*/
- ------------------------
/*/ Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 1013 or 1017 of the Indenture, check the box below:
[ ] Section 1013 [ ] Section 1017
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 1013 or Section 1017 of the Indenture, state the
amount you elect to have purchased:
$_____________
Date: Your Signature:
(Sign exactly as your name appears on
the Note)
Tax Identification No.:
Signature Guarantee: /*/
- ---------------------
/*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE
The following exchanges of a part of this Global Certificate for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of
Amount of decrease Amount of increase this Global Signature of
in Principal Amount in Principal Amount Certificate following authorized officer of
of this Global of this Global such decrease (or Trustee or Note
DATE OF EXCHANGE Certificate Certificate increase) Custodian
- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------
<S> <C> <C>
</TABLE>
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<PAGE>
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on premium and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
thereunder shall be promptly paid in full or performed, all in accordance with
the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantors to the Holders of Notes
and to the Trustee pursuant to this Subsidiary Guarantee are expressly set forth
in Article 14 of the Indenture, and reference is hereby made to such Article for
the precise terms of this Subsidiary Guarantee. The terms of Article 14 of the
Indenture are incorporated herein by reference.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's obligations under the Notes and
the Indenture and shall inure to the benefit of the Trustee and the Holders of
Notes and their successors and assigns and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. Notwithstanding the foregoing, the Subsidiary Guarantees may be
discharged in accordance with Article IV of the Indenture and any Subsidiary
Guarantor that satisfies the provisions of Section 14.04 of the Indenture shall
be released of its obligations hereunder. This is a Subsidiary Guarantee of
payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the Indenture and
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee of the Notes was
entered into, after giving effect to the incurrence of existing Indebtedness
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<PAGE>
immediately prior to such time; provided that, it shall be a presumption in any
lawsuit or other proceeding in which such Subsidiary Guarantor is a party that
the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that, in making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with
the previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and any other rights such Subsidiary Guarantor
may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in that
certain Indenture dated as of May 1, 1997 between Pride Petroleum Services, Inc.
and The Chase Manhattan Bank, as Trustee, as supplemented by the First
Supplemented Indenture dated as of May __, 1997 between Pride Petroleum
Services, Inc. and the Chase Manhattan Bank, as Trustee, unless otherwise
indicated.
[Name of Subsidiary Guarantor]
By:
Name:
Title:
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