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): APRIL 20, 1998
PRIDE INTERNATIONAL, INC.
(FORMERLY PRIDE PETROLEUM SERVICES, INC.)
(Exact name of registrant as specified in its charter)
LOUISIANA 1-13289 76-0069030
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5847 SAN FELIPE STREET, SUITE 3300
HOUSTON, TEXAS 77057
(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.
On April 20, 1998, Pride International, Inc. (the "Company") entered
into an Underwriting Agreement dated April 20, 1998 (the "Underwriting
Agreement") among the Company and Smith Barney Inc. and Morgan Stanley & Co.
Incorporated, as underwriters, relating to the offering of $511,431,000
aggregate principal amount at maturity (together with up to $76,714,000
aggregate principal amount at maturity subject to an underwriters' overallotment
option) of the Company's Zero Coupon Convertible Subordinated Debentures Due
2018 (the "Debentures") under its Registration Statement on Form S-3
(Registration No. 333-44925). The Underwriting Agreement is being filed as an
exhibit to this report. A form of First Supplemental Indenture between the
Company and Marine Midland Bank, as trustee (the "Trustee"), setting forth
certain terms of the Debentures, a form of Debenture and an opinion of Baker &
Botts, L.L.P., counsel to the Company, as to certain tax matters relative to the
Debentures are also being filed as exhibits to this report. The Statement of
Eligibility and Qualification under the Trust Indenture Act of 1939 of the
Trustee is bound separately on Form T-1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
1.1 -- Underwriting Agreement dated April 20, 1998 among Pride
International, Inc., Smith Barney Inc. and Morgan Stanley &
Co. Incorporated.
4.1 -- Form of First Supplemental Indenture between Pride
International, Inc. and Marine Midland Bank, as trustee.
4.2 -- Form of Debenture (contained in Exhibit 4.1).
8.1 -- Opinion of Baker & Botts, L.L.P., counsel to the Company,
as to certain tax matters relative to the Debentures.
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Marine Midland Bank is bound
separately on Form T-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 INTERNATIONAL, INC.
By:/s/ EARL W. MCNIEL
Vice President and Chief Financial Officer
Date: April 23, 1998
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EXHIBIT 1.1
$511,431,000
PRIDE INTERNATIONAL, INC.
Zero Coupon Convertible Subordinated Debentures due 2018
UNDERWRITING AGREEMENT
April 20, 1998
SMITH BARNEY INC.
MORGAN STANLEY & CO. INCORPORATED
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Pride International, Inc., a Louisiana corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell
$511,431,000 aggregate principal amount at maturity of its Zero Coupon
Convertible Subordinated Debentures due 2018 (the "Firm Debentures") to Smith
Barney Inc. and Morgan Stanley & Co. Incorporated (the "Underwriters"). The
Company also proposes, upon the terms and conditions set forth herein, to issue
and sell to the several Underwriters up to an additional $76,714,000 aggregate
principal amount at maturity of its Zero Coupon Convertible Subordinated
Debentures due 2018 (the "Additional Debentures"). The Firm Debentures and the
Additional Debentures are hereinafter sometimes collectively referred to as the
"Debentures". The Debentures will be issued pursuant to the provisions of an
Indenture to be dated as of April 1, 1998 (the "Original Indenture"), as amended
and supplemented by the First Supplemental Indenture thereto to be dated as of
April 24, 1998 (the Original Indenture, as so amended and supplemented, the
"Indenture"), between the Company and Marine Midland Bank, as Trustee (the
"Trustee"). The Company's common stock, no par value, is hereinafter referred to
as the "Common Stock".
The Company wishes to confirm as follows its agreement with you in
connection with the several purchases of the Debentures by the Underwriters.
1. 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 the related prospectus,
for the registration of its Common Stock and certain of its debt securities
(including the Debentures) under the Act and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations under the Act (the
"1933 Act Regulations"). Such registration statement has been declared effective
by the Commission and the Original Indenture has been duly qualified under the
Trust Indenture Act of
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1939, as amended (the "1939 Act"). A prospectus supplement reflecting the terms
of the Debentures, the terms of the offering thereof and the other matters set
forth therein has been prepared and will be filed pursuant to Rule 424 of the
1933 Act Regulations. Such prospectus supplement, in the form first filed after
the date hereof pursuant to Rule 424 is herein referred to as the "Prospectus
Supplement." Such registration statement on Form S-3 (Registration No.
333-44925), as amended at the date hereof, is herein called the "Registration
Statement," and the basic prospectus included therein relating to all offerings
of securities under the Registration Statement, as supplemented by the
Prospectus Supplement, is herein called the "Prospectus"; PROVIDED, HOWEVER,
that, if such basic prospectus is amended or supplemented on or after the date
hereof but prior to the date on which the Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus" shall refer to the basic prospectus
as so amended or supplemented and as supplemented by the Prospectus Supplement;
and PROVIDED, FURTHER, that all references to the "Registration Statement" and
the "Prospectus" shall be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The term "Prepricing Prospectus" as used in this Agreement
means the prospectus subject to completion and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the Registration Statement, any Prepricing
Prospectus, the Prospectus, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees, subject to
all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of 37.933% of the principal
amount at maturity thereof, the principal amount at maturity of the Firm
Debentures set forth opposite the name of such Underwriter in Schedule I hereto
(or such principal amount at maturity of the Firm Debentures increased as set
forth in Section 10 hereof).
The Company also hereby agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Company, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the Prospectus Supplement (or, if such 30th day shall be a Saturday or Sunday or
a holiday, on the next business day thereafter when the New York Stock Exchange
is open for trading), up to $76,714,000 aggregate principal amount at maturity
of Additional Debentures. The purchase price of any Additional Debentures which
the Underwriters may elect to purchase shall be the same as the purchase price
of the Firm Debentures, plus accrued original issue discount, if any, accrued
from the issue date of the Firm Debentures. Additional Debentures may be
purchased only for the purpose of covering over-allotments made in connection
with the offering of the Firm Debentures. Upon any exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company the principal amount at maturity of Additional
Debentures which bears the same proportion to the aggregate principal amount at
maturity of Additional Debentures to be purchased by the Underwriters as the
principal amount at maturity of Firm Debentures set forth opposite the name
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of such Underwriter in Schedule I hereto (or such principal amount of Firm
Debentures increased as set forth in Section 10 hereof) bears to the aggregate
principal amount at maturity of the Firm Debentures.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Debentures as soon after this Agreement has become effective as in your
judgment is advisable and initially to offer the Debentures upon the terms set
forth in the Prospectus.
4. DELIVERY OF THE DEBENTURES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Debentures shall be made at the office
of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M.,
New York City time, on April 24, 1998 (the "Closing Date"). The place of closing
for the Firm Debentures and the Closing Date may be varied by agreement between
you and the Company.
Delivery to the Underwriters of and payment for any Additional Debentures
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you to the Company of the Underwriters' determination to purchase a
principal amount at maturity, specified in such notice, of Additional
Debentures. The place of closing for any Additional Debentures and the Option
Closing Date for such Debentures may be varied by agreement between you and the
Company.
The Firm Debentures and any Additional Debentures which the Underwriters
may elect to purchase will be delivered to you for the accounts of the several
Underwriters against payment of the purchase price therefor in immediately
available funds and registered in such names and in such denominations as you
shall request in writing prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or the Option Closing Date, as the case
may be. The Debentures to be delivered to the Underwriters shall be made
available to you in New York City for inspection and packaging not later than
9:30 A.M., New York City time, on the business day next preceding the Closing
Date or the Option Closing Date, as the case may be.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Debentures may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of
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the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the
Debentures 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 (iii) within the period of time referred to
in the first sentence in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act or any other
law. If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge (i) two signed
copies of the registration statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits to
the registration statement, (ii) such number of conformed copies of the
registration statement as originally filed and of each amendment thereto, but
without exhibits, as you may reasonably request, (iii) such number of copies of
the Indenture and of the Incorporated Documents, without exhibits, as you may
reasonably request, and (iv) such number of copies of the exhibits to the
Incorporated Documents as you may reasonably request.
(d) Prior to the end of the period of time referred to in the first
sentence in paragraph (f) below, the Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus or
file any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which, after you shall have
received a copy of the document proposed to be filed, you shall reasonably
object.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Debentures are
offered by the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time 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 any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Debentures are offered by the several Underwriters and by all dealers
to whom Debentures may be sold, both in connection with the offering and sale of
the Debentures and for such period of time
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thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Company or in the opinion
of counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend the
Prospectus (or to file under the Exchange Act any document which, upon filing,
becomes an Incorporated Document) in order to comply with the Act or any other
law, the Company will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto (or to such document), and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies thereof. In the event
that the Company and you, as Representatives of the several Underwriters, agree
that the Prospectus should be amended or supplemented, the Company, if requested
by you, will promptly issue a press release announcing or disclosing the matters
to be covered by the proposed amendment or supplement.
(g) Prior to any public offering of the Debentures, the Company will
cooperate with you and with counsel for the Underwriters in connection with the
registration or qualification of the Debentures and the shares of Common Stock
issuable upon conversion of the Debentures for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of such
jurisdictions as you may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general consent to
service of process in suits in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the "effective date" (as defined in Rule
158 under the Act) of the Registration Statement and ending not later than 15
months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section ll(a) of
the Act and Rule 158 thereunder.
(i) For a period of five years after the date of this Agreement, the
Company will furnish to you as soon as available a copy of each report of the
Company mailed to its shareholders or filed with the Commission and such other
publicly available information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Representatives for all
reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel for the Underwriters) incurred by you in connection herewith.
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(k) The Company will apply the net proceeds from the sale of the
Debentures substantially in accordance with the description set forth under the
caption "Use of Proceeds" in the Prospectus Supplement.
(l) If Rule 430A of the Act is employed, the Company will timely
file the Prospectus pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options or warrants to purchase Common Stock, for a period of 90 days after the
date of the Prospectus, without the prior written consent of Smith Barney Inc.
Notwithstanding the foregoing, during such period the Company may (i) grant
stock options pursuant to the Company's existing stock option plans and, if
approved by the shareholders of the Company at the 1998 Annual Meeting of
Shareholders, pursuant to the Company's 1998 Long-Term Incentive Plan and (ii)
issue a note convertible into Common Stock in connection with the purchase of
the AMETHYST I as described in the Prospectus, PROVIDED, THAT, such note shall
not be convertible into Common Stock during the period of 90 days after the date
of the Prospectus.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance reasonably satisfactory to you, signed by each of
its current executive officers and directors.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Debentures.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. The Registration
Statement in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective and the Prospectus and any supplement or amendment thereto when filed
with the Commission under Rule 424(b) under the Act, complied or will comply in
all material respects with the provisions of the Act and will not at any such
times 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
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus (or
any supplement or amendment thereto)
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made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were
filed or became effective (or, if any amendment with respect to any such
document was filed when such amendment was filed or became effective), conformed
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, and any further Incorporated Documents so filed
will, when they are filed, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder; no
such document when it was filed or became effective (or, if an amendment with
respect to any such document was filed, when such amendment was filed or became
effective), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(d) The Indenture has been duly authorized and, upon its execution
and delivery by the Company and assuming due execution and delivery by the
Trustee, will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter 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, and the Original Indenture has been duly qualified under the
1939 Act and conforms to the description thereof in the Registration Statement
and the Prospectus.
(e) The Debentures have been duly authorized and, when executed by
the Company and authenticated by the Trustee in accordance with the Indenture
and delivered to you against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will constitute valid
and binding obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws now or
hereafter 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, and the Debentures will conform to
the description thereof in the Registration Statement and the Prospectus.
(f) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the shares of Common Stock
issuable upon conversion of the Debentures have been duly authorized and
reserved for issuance and, when delivered upon conversion of the Debentures,
will have been validly issued and fully paid and will be nonassessable and free
of any preemptive or similar rights; and the capital stock of the Company
conforms to the description thereof in the Registration Statement and the
Prospectus.
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(g) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Louisiana with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties or results of operations of
the Company and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect").
(h) 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,
1997 or is described in the Registration Statement as having been acquired after
December 31, 1997. Each of the Company's subsidiaries listed on Schedule II
hereto (the "Subsidiaries") has been duly organized, is validly existing and is
in good standing in the jurisdiction of its incorporation, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a Material Adverse Effect.
(i) 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.
(j) 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. 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.
(k) 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).
(l) Neither the issuance and sale of the Debentures, the issuance of
Common Stock upon conversion of the Debentures, the execution, delivery or
performance of this Agreement and the
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Indenture by the Company, nor the consummation by the Company of the
transactions contemplated hereby and thereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Debentures
under the Act, registration under the Act of the shares of Common Stock issuable
upon conversion of the Debentures, qualification of the Indenture under the 1939
Act, and compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected in accordance with
this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) except as would not have a Material Adverse
Effect, conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound, or
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the Subsidiaries
or any of their respective properties, or will result in the creation or
imposition of any Lien upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(m) 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
Debentures, suspends the effectiveness of the Registration Statement, prevents
or suspends the use of any Prepricing Prospectus or the Prospectus or prevents
or suspends the sale of the Debentures in any of the jurisdictions that you may
have specified pursuant to Section 5(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 Debentures 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.
(n) The accountants, Coopers & Lybrand L.L.P., who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.
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(o) The consolidated financial statements, together with related
schedules and notes, included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), present
fairly in all material respects the consolidated financial position, results of
operations and cash flows of the Company and the Subsidiaries on the basis
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are in all material
respects accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and the
Subsidiaries.
(p) Except as disclosed in the Registration Statement or the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, that is material to the Company and its
Subsidiaries taken as a whole, or 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 there has not been any material adverse
change, or any development involving or which may reasonably be expected to
involve, a prospective material adverse change, in the condition (financial or
other), business or results of operations of the Company and the Subsidiaries
taken as a whole.
(q) Except as otherwise set forth in the Prospectus or such as would
not have a Material Adverse Effect, each of the Company and the Subsidiaries has
good and marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all Liens, except Liens for
taxes not yet due and payable and Liens described in the Registration Statement
or the Prospectus or in a document filed as an exhibit to the Registration
Statement. All the property described in the Prospectus as being held under
lease by each of the Company and the Subsidiaries is held by it under valid,
subsisting and enforceable leases, except as would not have a Material Adverse
Effect.
(r) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the
Debentures, will not distribute any offering material in connection with the
offering and sale of the Debentures other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(s) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are, in all material respects, necessary to own its
respective properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus; the Company and each of the Subsidiaries has fulfilled and performed
all 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 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; and, except as
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described in the Prospectus, none of such permits contains any restriction that
is materially burdensome to the Company and any of the Subsidiaries considered
as a whole.
(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's authorization; (ii) transactions are recorded as
necessary to permit preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any material differences.
(u) 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, to the Company's knowledge, 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.
(v) The Company and each of the Subsidiaries have filed all material
tax returns required to be filed, other than those filings being contested in
good faith, and neither the Company nor any Subsidiary is in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto.
(w) Except as contemplated by the Registration Rights Agreement
dated as of March 10, 1997 among the Company, Gialos B.V. and Sertofin B.V., 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 because of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Agreement.
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(x) 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
rights of the Company and the Subsidiaries with respect to the foregoing.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each of you and each other Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Debentures by such Underwriter to any person if a copy of the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such Prepricing Prospectus was corrected in the
Prospectus (as amended or supplemented), provided that the Company has delivered
the Prospectus (as amended or supplemented to the several Underwriters in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel and
payment of all fees and expenses. Such Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the Company has agreed in writing to pay such fees
and expenses, (ii) the Company has failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such controlling
person shall have been advised by its counsel that representation of such
indemnified party and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same
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counsel has been proposed) due to actual or potential differing interests
between them (in which case the Company shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Company shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Smith Barney Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company shall not be liable for any
settlement of any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Company
agrees to indemnify and hold harmless any Underwriter and any such controlling
person, to the extent provided in the preceding paragraph, from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with respect
to information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Company,
any of its directors, any such officer, or any such controlling person, based on
the Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the Company by paragraph (b) above (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 such Underwriter's expense), and the Company, its directors, any
such officer, and any such controlling person, shall have the rights and duties
given to the Underwriters by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
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 or 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
Debentures, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
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Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (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; provided that, in the
event that the Underwriters shall have purchased any Additional Debentures
hereunder, any determination of the relative benefits received by the Company or
the Underwriters from the offering of the Debentures shall include the net
proceeds (before deducting expenses) received by the Company and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Debentures, in each case computed on the basis of the
respective amounts set forth in the notes to 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 hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The foregoing
contribution obligations shall be in addition to any liability which the Company
on the one hand and the Underwriters on the other may otherwise have.
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above 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
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Debentures
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter 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 7 are several in proportion to the
respective principal amounts at maturity of Firm Debentures set forth opposite
their names in Schedule I hereto (or such principal amounts at maturity of Firm
Debentures increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
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indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Debentures and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters to purchase the Firm Debentures hereunder are subject to the
following conditions:
(a) The Registration Statement shall be effective on the date
hereof, or if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment thereto to be declared effective before
the offering of the Debentures may commence, such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act shall
have been timely made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business, properties
or results of operations of the Company or the Subsidiaries not contemplated by
the Prospectus, which in your opinion, would materially adversely affect the
market for the Debentures, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company which makes any
statement made in the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your opinion, as
Representatives of the several Underwriters, materially adversely affect the
market for the Debentures.
(c) 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) the Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of Louisiana and has the
corporate power and authority to own and lease its properties and to
conduct its business as described in the Prospectus;
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(ii) the Company has the corporate power and authority to
enter into and perform this Agreement and to issue, sell and deliver the
Debentures; 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;
(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 Debentures have been duly and validly authorized and
executed by the Company;
(v) the shares of Common Stock issuable upon conversion of the
Debentures have been validly authorized and reserved for issuance and,
when delivered upon conversion of the Debentures, will have been validly
issued and fully paid and non-assessable and will not be subject to
preemptive or similar rights pursuant to Louisiana law or the Company's
Articles of Incorporation or Bylaws;
(vi) based on the description of the Company and its
properties, operations, and activities contained in the Prospectus and the
Registration Statement, neither the issuance and sale by the Company of
the Debentures, the issuance by the Company of Common Stock upon
conversion of the Debentures nor the performance of the Company's
obligations pursuant to this Agreement and 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 or (B) violate any of the provisions of the
Articles of Incorporation or Bylaws of the Company as in effect on the
date of the opinion;
(vii) the Articles of Incorporation and Bylaws of the Company
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.
(d) 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;
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(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.
(e) You shall have received the written opinion of Jean Paul
Henderson, Associate General Counsel of Pride Forasol S.A., addressed to the
Underwriter and dated the Closing Date to the effect that:
(i) each of Pride Forasol S.A., Pride Foramer S.A. and Pride
Forinter Ltd. (the "Forasol Subsidiaries") has been duly incorporated and
is validly existing as a corporation under the laws of the jurisdiction of
its incorporation, 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 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.
(f) 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
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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 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;
(iii) the Indenture, assuming due authorization, execution and
delivery by the Company and by the Trustee, is a valid and binding
agreement of the Company, enforceable 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 and has been duly qualified
under the 1939 Act;
(iv) the Debentures (assuming due authorization thereof) 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;
(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 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.
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(vii) 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 Debentures 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 Debentures by the Underwriters;
(viii) the provisions of the Indenture described in the
Registration Statement and the Prospectus conform in all material respects
to the descriptions thereof contained in the Registration Statement and
the Prospectus;
(ix) 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;
(x) neither the issuance and sale by the Company of the
Debentures, the issuance of Common Stock by the Company upon conversion of
the Debentures nor the performance of the Company's obligations pursuant
to this Agreement and 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 instrument to which the Company or any Subsidiary is a party
or by which any of them is 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;
(xi) 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;
(xii) 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
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"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xiii) 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, except as contemplated by the Registration Rights
Agreement dated as of March 10, 1997 among the Company, Gialos B.V. and
Sertofin B.V.;
(g) 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 a corporation 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;
(iv) to such counsel's knowledge, except as disclosed in the
Prospectus and for options issued under the Pride International, Inc.
Long-Term Incentive Plan, the Pride International, Inc. 1993 Directors'
Stock Option Plan or the Pride International, Inc. Employee Stock Purchase
Plan, 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 by the Company of the
Debentures, the issuance by the Company of Common Stock upon conversion of
the Debentures nor the performance of the Company's obligations pursuant
to this Agreement and 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;
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(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, except as contemplated by the Registration Rights
Agreement dated as of March 10, 1997 among the Company, Gialos B.V. and
Sertofin B.V.;
(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 its properties and to conduct its 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 results 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 by the Company of the Debentures, the issuance by the Company of
Common Stock upon conversion of the Debentures nor the performance of the
Company's obligations pursuant to this Agreement and 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 non-U.S. Subsidiary is a party or bound, or
constitute a default under, any statute, rule or regulation to which any
non-U.S. 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 International, Inc. 1998 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,
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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 the related Schedules and the other financial, numerical, statistical
and accounting data included or incorporated by reference therein, or
omitted therefrom, as to which such counsel need express no belief) 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, notes thereto and
the auditors' reports thereto and the other financial, numerical,
statistical and accounting data included or incorporated by reference
therein, or omitted therefrom, as to which such counsel need express no
belief) 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 the
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 foreign Subsidiary with respect to which such opinion is given is
organized.
(h) You shall have received on the Closing Date an opinion of Vinson &
Elkins L.L.P., counsel for the Underwriters, dated the Closing Date and
addressed to you in form and substance reasonably satisfactory to you.
(i) You shall have received letters addressed to you and dated the date
hereof and the Closing Date from Coopers & Lybrand L.L.P., independent certified
public accountants, substantially in the forms heretofore approved by you.
(j) (i) there shall not have been any material adverse change in the
capital stock of the Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary course of business)
from that set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); (ii) there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, or
results of operations of the Company and the Subsidiaries taken as a whole;
(iii) the Company and the Subsidiaries shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to
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the Company and the Subsidiaries, taken as a whole, other than those reflected
in the Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (iv) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief operating officer and the chief financial officer of the
Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(k) The Company shall not have failed at or prior to the Closing Date to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(l) 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, 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.
(m) The shares of Common Stock issuable upon conversion of the Debentures
shall have been approved for listing, subject to notice of issuance, on the New
York Stock Exchange.
(n) The Company shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Company to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional
Debentures hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to in paragraphs (c) through (g) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (f) and
(g) shall be revised to reflect the sale of Additional Debentures.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing (or reproduction), and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
each amendment or supplement to any of them, this Agreement, the Indenture and
the Statement of Eligibility and Qualification of the Trustee on Form T-1; (ii)
the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Prepricing Prospectus, the Prospectus, the
Incorporated Documents, and all amendments
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or supplements to any of them, as may be reasonably requested for use in
connection with the offering and sale of the Debentures; (iii) the preparation,
printing (or reproduction), execution and delivery of the Indenture and the
preparation, printing, authentication, issuance and delivery of the Debentures,
including any stamp taxes in connection with the original issuance of the
Debentures; (iv) the printing (or reproduction) and delivery of this Agreement,
the Blue Sky Memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Debentures; (v)
the listing of the shares of Common Stock issuable upon conversion of the
Debentures on the New York Stock Exchange; (vi) the registration or
qualification of the Debentures and the shares of Common Stock issuable upon
conversion of the Debentures for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing (or reproduction), and delivery of the
Blue Sky Memorandum and such registration and qualification); (vii) the filing
fees in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.; (viii) the fees and expenses of the
Trustee; (ix) the fees and expenses associated with obtaining ratings for the
Debentures from nationally recognized statistical rating organizations; (x) the
expenses incurred by or on behalf of the Company and its officers and directors
in connection with presentations to prospective purchasers of the Debentures;
and (xi) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for a post-effective amendment to the Registration Statement to be declared
effective before the offering of the Debentures may commence, when notification
of the effectiveness of such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have become effective, it
may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company.
If, on the Closing Date or any Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Debentures or the Additional Debentures, as the case may be, which it or
they are obligated to purchase hereunder on such date, and the aggregate
principal amount at maturity of the Firm Debentures or the Additional
Debentures, as the case may be, which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate principal amount at maturity of Debentures which all
Underwriters are obligated to purchase on such date, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the principal
amount at maturity of Firm Debentures set forth opposite its name in Schedule I
hereto bears to the aggregate principal amount at maturity of Firm Debentures
set forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Smith Barney Inc., to purchase the Firm
Debentures or the Additional Debentures, as the case may be, which such
defaulting Underwriter or Underwriters are obligated, but fail or refuse, to
purchase. If, on the Closing Date or any Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Debentures or the Additional Debentures, as the case may be, which it or
they are obligated to purchase on such date and the aggregate principal amount
at maturity of the Firm Debentures or the Additional Debentures, as the case may
be, with respect to which such default occurs is more than one-tenth of the
aggregate principal amount at maturity of Debentures which the
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Underwriters are obligated to purchase on such date and arrangements
satisfactory to you and the Company for the purchase of such Debentures by one
or more non-defaulting Underwriters or other party or parties approved by you
and the Company are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or 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 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 such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases Debentures which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Debentures), as the case may be, (i) trading in the
Common Stock of the Company shall be suspended or subject to any material
restriction or limitation not in effect on the date of this Agreement; (ii)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (iii) a general moratorium on commercial banking activities
in New York or Texas shall have been declared by either federal or state
authorities, or (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the
Debentures on the terms set forth on the cover page of the Prospectus or to
enforce contracts for the resale of the Debentures by the Underwriters.
Notice of such termination may be given by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first, third and eighth paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters as
such information is referred to in Sections 6(b) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 5847 San Felipe, Suite 3300, Houston, Texas 77057, Attention: Robert
W. Randall, with a copy to Baker & Botts, L.L.P. at 910 Louisiana Street, One
Shell
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Plaza, Houston, Texas 77002, Attention: L. Proctor Thomas; (ii) if to you, as
Representatives of the several Underwriters, care of Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, Attention: Manager, Investment
Banking Division or (iii) in any case to such other address as the person to be
notified may have requested in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers, and the other controlling
persons referred to in Section 7 hereof and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Debentures in his
status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York.
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This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
PRIDE INTERNATIONAL, INC.
By/s/ PAUL A. BRAGG
Name: Paul A. Bragg
Title: President and Chief Operating
Officer
Confirmed as of the date first above
mentioned on behalf of themselves
SMITH BARNEY INC.
MORGAN STANLEY & CO. INCORPORATED
By SMITH BARNEY INC.
By /S/ MARK HUNT
Managing Director
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SCHEDULE I
PRINCIPAL AMOUNT
AT MATURITY
OF DEBENTURES
UNDERWRITER ------------------
Smith Barney Inc............................................. $ 255,715,500
Morgan Stanley & Co. Incorporated............................ $ 255,715,500
Total.................................................. $ 511,431,000
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EXHIBIT 4.1
DRAFT OF APRIL 22, 1998
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PRIDE INTERNATIONAL, INC.
AND
MARINE MIDLAND BANK,
TRUSTEE
------------------------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 24, 1998
TO
INDENTURE DATED AS OF APRIL 1, 1998
ZERO COUPON CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2018
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TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Terms Defined in the Original Indenture. ...........2
SECTION 1.2 Certain Definitions. ...............................2
ARTICLE TWO
THE DEBENTURES
SECTION 2.1 Debentures Form......................................6
SECTION 2.2 Designation and Amount...............................6
SECTION 2.3 Accrual of Original Issue Discount; Interest.........7
SECTION 2.4 Denominations........................................7
SECTION 2.5 Place of Payment.....................................7
ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 Additional Event of Default..........................8
SECTION 3.2 Rights of Holders to Receive Payment.................8
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 Additional Restrictions on Supplemental Indentures...8
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 Redemption...........................................9
SECTION 5.2 Selection of Debentures to be Redeemed..............10
SECTION 5.3 Deposit of Redemption Price.........................10
SECTION 5.4 Purchase............................................10
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ARTICLE SIX
CONVERSION
SECTION 6.1 Conversion..........................................23
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 Special Tax Event Conversion........................35
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 Governing Law. ....................................36
SECTION 8.2 Trustee's Disclaimer. .............................36
SECTION 8.3 Interest Limitations................................36
EXHIBIT A FORM OF DEBENTURE........................................A-1
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FIRST SUPPLEMENTAL INDENTURE dated as of April 24, 1998 between
PRIDE INTERNATIONAL, INC., a Louisiana corporation (the "Company"), and MARINE
MIDLAND BANK, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has executed and delivered to the Trustee an
Indenture, dated as of April 1, 1998 (the "Original Indenture" and as
supplemented by this First Supplemental Indenture, the "Indenture"), providing
for the issuance by the Company from time to time of its unsecured subordinated
debentures, notes or other evidences of indebtedness (the "Securities"),
issuable in one or more series;
WHEREAS, Section 901(5) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
establish the form and terms of any series of Securities;
WHEREAS, Section 901(4) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
change or eliminate any provision of the Original Indenture with respect to any
series of Securities when there is no Security of such series Outstanding;
WHEREAS, Sections 901(2) and 901(3) of the Original Indenture permit
the execution of supplemental indentures without the consent of any Holders to
add to the covenants of the Company for the benefit of, and to add any
additional Events of Default with respect to, all or any series of Securities;
WHEREAS, Section 301 of the Original Indenture provides that the
Company may enter into supplemental indentures to establish certain terms and
provisions of a series of Securities issued pursuant to the Original Indenture;
WHEREAS, the Company has duly authorized and desires to cause to be
issued pursuant to the Original Indenture and this First Supplemental Indenture
a series of Securities to be designated the "Zero Coupon Convertible
Subordinated Debentures Due 2018" (the "Debentures");
WHEREAS, the Company, pursuant to the foregoing authority, proposes
in and by this First Supplemental Indenture to supplement and amend the Original
Indenture insofar as it will apply to the Debentures in certain respects; and
WHEREAS, all things necessary have been done to make the Debentures,
when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
First Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
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NOW, THEREFORE, the Company and the Trustee hereby agree that the
following provisions supplement the Original Indenture solely with respect to
the series of Securities that consists of the Debentures:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 TERMS DEFINED IN THE ORIGINAL INDENTURE.
Each capitalized term used but not defined in this First
Supplemental Indenture shall have the meaning assigned to such term in the
Original Indenture.
SECTION 1.2 CERTAIN DEFINITIONS.
The following definitions are hereby added to, or substituted in
lieu of definitions contained in, Section 101 of the Indenture, but only with
respect to the Debentures issued in accordance with the provisions hereof:
"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.
"Capital Stock" 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.
"Change in Control" means (i) a determination by the Company that
any person or group (as defined for purposes of Rules 13d-3 and 13d-5
promulgated under the Exchange Act, whether or not applicable) has become
the direct or indirect beneficial owner (as defined for purposes of Rules
13d-3 and 13d-5 promulgated under the Exchange Act, whether or not
applicable) 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 Rules 13d-3 and 13d-5 promulgated under the Exchange Act,
whether or not applicable) in the
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aggregate by (x) the shareholders of the Company immediately prior to such
merger or consolidation, or (y) if the record date has been set to
determine the shareholders of the Company entitled to vote on such merger
or consolidation, the shareholders 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.
"Common Stock" means Common Stock, no par value, of the Company as
it exists on the date of this First Supplemental Indenture or any other
Capital Stock of the Company into which such Common Stock shall be
reclassified or changed.
"Continuing Director" means an individual who (i) is a member of the
Board of Directors and (ii) either (a) was a member of the Board of
Directors on the Issue Date or (b) whose nomination for election or
election to the Board of Directors was approved by the 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.
"Conversion Agent" means an office or agency where Debentures may be
presented for conversion pursuant to the terms and conditions of this
First Supplemental Indenture.
"Issue Date" of any Debenture means the date on which the Debenture
was originally issued or deemed issued as set forth on the face of the
Debenture.
"Issue Price" of any Debenture means, in connection with the
original issuance of such Debenture, the initial issue price at which the
Debenture is sold as set forth on the face of the Debenture.
"Legal Holiday" means a day that is not a Business Day in the Place
of Payment for the Debentures.
"Market Price" means the average of the Sale Price of the Common
Stock for the five Trading Day period ending on and including the third
Trading Day prior to the applicable Purchase Date, appropriately adjusted
to take into account the actual occurrence, during the seven Trading Days
preceding such Purchase Date, of any event described in Section 1506, 1507
or 1508; SUBJECT, HOWEVER, to the conditions set forth in Sections 1509
and 1510.
"Original Issue Discount" of any Debenture means the difference
between the Issue Price and the Principal Amount at Maturity of the
Debenture as set forth on the face of the Debenture.
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"Paying Agent" means an office or agency where Debentures may be
presented for purchase or payment.
"Principal Amount at Maturity" means, with respect to any Debenture,
the principal amount due at the maturity thereof as set forth on the face
of the Debenture.
"Sale Price" of a single share of Common Stock on any Trading Day
means the closing per share sale price for the Common Stock (or, if no
closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid and
average ask prices) on such Trading Day as reported in composite
transactions for the principal United States securities exchange on which
the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional securities exchange, as reported by the
National Association of Debentures Dealers Automated Quotation System.
"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 of
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.
"Tax Event" means that the Company shall have received an opinion
from independent tax counsel experienced in such matters to the effect
that, on or after the date of this First Supplemental Indenture, as a
result of (a) any amendment to, or change (including any prospective
change) in, the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein or (b)
any amendment to, or change in, an interpretation or application of such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority, in each case which amendment or change is enacted,
promulgated, issued or announced or which interpretation is issued or
announced or which action is taken, on or after the date of this First
Supplemental Indenture, there is more than an insubstantial risk that
interest (including Original Issue Discount) payable on the Debentures
either (i) would not be deductible on a current accrual basis or (ii)
would not be deductible under any other method, in either case in whole or
in part, by the Company (by reason of deferral, disallowance, or
otherwise) for United States federal income tax purposes.
"Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for
trading or quotation.
"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
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contingency) to vote in the election of members of the board of directors
or comparable body of such Person.
"Wholly Owned Subsidiary" means, with respect to the Company, any
Subsidiary of the Company 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.
The following terms are defined in the places indicated:
TERM DEFINED IN SECTION
Average Sale Price 1501
Change in Control Purchase Date 1110 (a)
Change in Control Purchase Notice 1110 (c)
Change in Control Purchase Price 1110 (a)
Company Notice 1109 (e)
Company Notice Date 1109 (e)
Conversion Date 1502
Conversion Rate 1501
Exchange Act 1109 (d)
Ex-Dividend Time 1501
Extraordinary Cash Dividend 1508
Global Debentures 2.1
Interest Payment Date 1601
Option Exercise Date 1601
Over-Allotment Option 2.2 (b)
Purchase Date 1109 (a)
Purchase Notice 1109 (a)
Purchase Price 1109 (a)
Regular Record Date 1601
Restated Principal Amount 1601
Securities Act 1109 (d)
Tax Event Date 1601
Time of Determination 1501
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ARTICLE TWO
THE DEBENTURES
SECTION 2.1 DEBENTURES FORM.
The Debentures shall be substantially in the form of EXHIBIT A
hereto, which is a part of this First Supplemental Indenture, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Indenture and this First Supplemental
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers of the Company executing such Debentures, as
evidenced by their execution of the Debentures.
The Debentures will initially be issued in permanent global form,
substantially in the form of EXHIBIT A hereto (the "Global Debentures"). Each
Global Debenture shall represent such of the Outstanding Debentures as shall be
specified therein and shall provide that it shall represent the aggregate amount
of Outstanding Debentures from time to time endorsed thereon and that the
aggregate amount of Outstanding Debentures represented thereby may from time to
time be reduced to reflect exchanges and redemptions. Any endorsement of a
Global Debenture to reflect the amount, or any increase or decrease in the
amount, of Outstanding Debentures represented thereby shall be made by the
Trustee in accordance with written instructions or such other written form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in the Global
Debenture.
The Company initially appoints The Depository Trust Company and the
Trustee to act as Depositary and Securities Custodian, respectively, with
respect to the Global Debentures.
The Company initially appoints the Trustee to act as Paying Agent
with respect to the Debentures.
SECTION 2.2 DESIGNATION AND AMOUNT.
(a) The Debentures shall be entitled the "Zero Coupon Convertible
Subordinated Debentures Due 2018" of the Company.
(b) The Trustee shall authenticate and deliver Debentures for
original issue in an aggregate Principal Amount at Maturity of up to
$511,431,000 upon Company Order for the authentication and delivery of
Debentures, without any further action by the Company; PROVIDED, HOWEVER, that
in the event the Company sells any Debentures pursuant to the over-allotment
option (the "Over-Allotment Option") granted pursuant to the Underwriting
Agreement dated April 20, 1998 between the Company, Smith Barney Inc. and Morgan
Stanley & Co. Incorporated, then the Trustee shall authenticate and deliver
Debentures for original issue in an aggregate Principal Amount at Maturity of up
to $511,431,000 plus up to $76,714,000 aggregate Principal Amount at Maturity of
Debentures sold pursuant to the Over-Allotment Option upon Company Order for the
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authentication and delivery of Debentures, without any further action by the
Company. The aggregate Principal Amount at Maturity of Debentures that may be
authenticated and delivered under the Indenture may not exceed the amount set
forth in the foregoing sentence, subject to the proviso therein, except for
Debentures authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Debentures pursuant to Section 203, 304, 305,
306, 906 or 1107 of the Indenture.
(c) The Company may not issue new Debentures to replace Debentures
that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article Fifteen.
SECTION 2.3 ACCRUAL OF ORIGINAL ISSUE DISCOUNT; INTEREST.
The Debentures shall be Original Issue Discount Securities. Original
Issue Discount shall accrue with respect to the Debentures at the rate set forth
in paragraph 1 of the Debentures, commencing on the Issue Date of the
Debentures. Except as provided in Article Sixteen, there shall be no periodic
payments of interest on the Debentures. In case of an Event of Default, the
principal amount of the Debentures that may be declared due and payable shall be
the Issue Price plus accrued Original Issue Discount (or if the Debentures have
been converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount, plus accrued and unpaid interest) to and including the date of
such default or declaration, as the case may be.
SECTION 2.4 DENOMINATIONS.
The Debentures shall be in fully registered form without coupons in
denominations of $1,000 of Principal Amount at Maturity or any integral multiple
thereof.
SECTION 2.5 PLACE OF PAYMENT.
The Place of Payment for the Debentures shall be the Borough of
Manhattan, The City of New York. Section 1002 of the Indenture is hereby
amended, but only with respect to the Debentures issued in accordance with the
provisions hereof, by replacing the first sentence thereof with the following:
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency of the Trustee, Security Registrar, Paying
Agent and Conversion Agent where Debentures may be presented or
surrendered for payment, where Debentures may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served.
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ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 ADDITIONAL EVENT OF DEFAULT.
The following Event of Default is hereby added to Section 501 of the
Indenture, but only with respect to the Debentures issued in accordance with the
provisions hereof:
(8) the Company (i) defaults in the payment of the Principal Amount
at Maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price with respect to
any Debenture when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise, or (ii) defaults in the delivery of shares of Common
Stock (or cash in lieu of fractional interests in shares of Common Stock)
in accordance with the terms hereof when such Common Stock or cash is
required to be delivered upon conversion of a Debenture and such default
in this clause (ii) is not remedied for a period of 10 days.
SECTION 3.2 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Section 508 of the Indenture is hereby deleted in its entirety and
the following is substituted in lieu thereof, but only with respect to the
Debentures issued in accordance with the provisions hereof:
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PAYMENTS.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right, which is absolute and unconditional,
(a) to receive payment of the Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, in respect of the
Debentures held by such Holder on or after the respective due dates
expressed in the Debentures or any Redemption Date, (b) to convert such
Debentures in accordance with Article Fifteen or (c) to institute suit for
the enforcement of any such payment on or after such respective dates or
the right to convert, and such rights shall not be impaired or adversely
affected without the consent of such Holder.
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 ADDITIONAL RESTRICTIONS ON SUPPLEMENTAL INDENTURES.
A new Section 907 is hereby added to Article Nine of the Indenture,
but only with respect to the Debentures issued in accordance with the provisions
hereof, as follows:
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SECTION 907. SUPPLEMENTAL INDENTURE WITHOUT CONSENT OF HOLDERS OF
DEBENTURES.
Notwithstanding Section 902, without the consent of each Holder
affected, an amendment or supplement to this Indenture or the Debentures
may not:
(1) make any change to the Principal Amount at Maturity of the
Debentures whose Holders must consent to an amendment or supplement;
(2) make any change in the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Debentures, reduce the rate of interest referred to in
Section 1601 upon the occurrence of a Tax Event or extend the time for
payment of Original Issue Discount or interest, if any, on any Debenture;
(3) reduce the Principal Amount at Maturity or the Issue Price of or
extend the Stated Maturity of any Debenture;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Debenture or extend the date on which the Purchase
Price or Change in Control Purchase Price of any Debenture is payable;
(5) make any Debenture payable in money or securities other than
that stated in the Debenture;
(6) make any change that adversely affects the right to convert any
Debenture (including the right to receive cash in lieu of Common Stock);
(7) make any change that adversely affects the right to require the
Company to purchase the Debentures in accordance with the terms thereof
and this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase); or
(8) make any change to the provisions of the Indenture relating to
the purchase of the Debentures at the option of the Holder pursuant to
Sections 1109 and 1110 which change would result in a violation of
applicable federal or state securities laws (including positions of the
SEC under applicable no-action letters), whether as a result of the
exercise or performance of any rights or obligations under such provisions
or otherwise.
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 REDEMPTION.
(a) There shall be no sinking fund for the retirement of the
Debentures.
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(b) The Company, at its option, may redeem the Debentures in
accordance with the provisions of paragraphs 5 and 7 of the Debentures.
(c) The notice of redemption provided for in Section 1104 of the
Indenture shall also state (1) the Conversion Rate; (2) the name and address of
the Conversion Agent; (3) that Debentures called for redemption may be converted
at any time before the close of business on the Redemption Date; (4) that
Holders who want to convert Debentures must satisfy the requirements set forth
in paragraph 8 of the Debentures and (5) that, unless the Company defaults in
making payment of such Redemption Price, Original Issue Discount on Debentures
called for redemption and interest, if any, will cease to accrue on and after
the Redemption Date.
SECTION 5.2 SELECTION OF DEBENTURES TO BE REDEEMED.
Section 1103 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
If any Debenture selected for partial redemption is thereafter
surrendered for conversion in part before termination of the
conversion right with respect to the portion of the Debenture so
selected, the converted portion of such Debenture shall be deemed
(so far as may be), solely for purposes of determining the aggregate
Principal Amount at Maturity of Debentures to be redeemed by the
Company, to be the portion selected for redemption. Debentures that
have been converted during a selection of Debentures to be redeemed
may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 1103 shall affect the right of
any Holder to convert any Debenture pursuant to Article Fifteen
before the termination of the conversion right with respect thereto.
SECTION 5.3 DEPOSIT OF REDEMPTION PRICE.
Section 1105 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
The Trustee or the Paying Agent shall as promptly as practicable
return to the Company any money, with interest, if any, thereon (subject
to the provisions of Section 601(a)), not required for that purpose
because of conversion of Debentures pursuant to Article Fifteen. If such
money is held by the Company in trust and is not required for such
purpose, it shall be discharged from such trust.
SECTION 5.4 PURCHASE.
New Sections 1108 through 1116 are hereby added to Article Eleven of
the Indenture, but only with respect to the Debentures issued in accordance with
the provisions hereof, as follows:
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SECTION 1108. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Debentures, the Company
may arrange, in lieu of redemption, for the purchase and conversion of any
Debentures called for redemption by an agreement with one or more
investment bankers or other purchasers to purchase all or a portion of
such Debentures by paying to the Trustee in trust for the Holders whose
Debentures are to be so purchased, on or before the close of business on
the Redemption Date, an amount that, together with any amounts deposited
with the Trustee by the Company for the redemption of such Debentures, is
not less than the Redemption Price, together with interest, if any,
accrued to the Redemption Date of such Debentures. Notwithstanding
anything to the contrary contained in this Article Eleven, the obligation
of the Company to pay the Redemption Price of such Debentures, including
all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no
such agreement shall relieve the Company of its obligation to pay such
Redemption Price and such accrued interest, if any. If such an agreement
is entered into, any Debentures not duly surrendered for conversion by the
Holders thereof may, at the option of the Company, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such
Holders and (notwithstanding anything to the contrary contained in Article
Fifteen) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the Redemption Date, subject
to payment of the above amount as aforesaid. The Trustee shall hold and
pay to the Holders whose Debentures are selected for redemption any such
amount paid to it for purchase and conversion in the same manner as it
would moneys deposited with it by the Company for the redemption of
Debentures. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of
any Debentures shall increase or otherwise affect any of the powers,
duties, responsibilities or obligations of the Trustee as set forth in the
Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of
any Debentures between the Company and such purchasers, including the
costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under the
Indenture.
SECTION 1109. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER.
(a) GENERAL. Debentures shall be purchased by the Company pursuant
to paragraph 6 of the Debentures as of April 24, 2003, April 24, 2008 and
April 24, 2013 (each, a "Purchase Date"), at the purchase price specified
therein (each, a "Purchase Price"), at the option of the Holder thereof,
upon:
(1) delivery to the Paying Agent at the office of the Paying
Agent or to the office or agency referred to in Section 1002 by the
Holder of a written notice of purchase (a "Purchase Notice") at any
time from the opening of business on the date that is 20 Business
Days prior to a Purchase Date until the close of business on such
Purchase Date stating:
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(A) the certificate number of the Debenture which the
Holder will deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of
the Debenture which the Holder will deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof,
(C) that such Debenture shall be purchased on the
Purchase Date pursuant to the terms and conditions specified
in the Indenture and in paragraph 6 of the Debentures; and
(D) if the Company elects pursuant to Section 1109(b) to
pay the Purchase Price on such Purchase Date, in whole or in
part, in shares of Common Stock, but such portion of the
Purchase Price to be paid in Common Stock is ultimately to be
paid in cash because any condition in Section 1109(d) is not
satisfied, such Holder elects (i) to withdraw such Purchase
Notice as to some or all of the Debentures to which it relates
(stating the Principal Amount at Maturity and certificate
numbers of the Debentures as to which such withdrawal shall
relate), or (ii) to receive cash in respect of the Purchase
Price for all Debentures subject to such Purchase Notice; and
(2) delivery of such Debenture prior to, on or after the
Purchase Date (together with all necessary endorsements) to the
Paying Agent at the offices of the Paying Agent or to the office or
agency referred to in Section 1002, such delivery being a condition
to receipt by the Holder of the Purchase Price therefor; PROVIDED,
HOWEVER, that such Purchase Price shall be so paid pursuant to this
Section 1109 only if the Security so delivered conforms in all
respects to the description thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of
Section 1111, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 1109(a)(1) above, such Holder
shall be deemed to have elected to receive cash in respect of the Purchase
Price otherwise payable in Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1109, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
the Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
Any purchase by the Company contemplated pursuant to the provisions
hereof shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date
and the time of delivery of the Debenture.
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Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or the office or agency referred to in
Section 1002 the Purchase Notice contemplated by this Section 1109(a)
shall have the right to withdraw at any time prior to the close of
business on the Purchase Date such Purchase Notice by delivery of a
written notice of withdrawal to the Paying Agent or such office or agency
in accordance with Section 1111.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE.
The Debentures to be purchased pursuant to Section 1109(a) may be paid
for, at the election of the Company, in cash or Common Stock, or in any
combination of cash and Common Stock, subject to the conditions set forth
in this Section 1109. The Company shall designate, in the notice from the
Company delivered pursuant to Section 1109(e), whether the Company will
purchase the Debentures for cash or Common Stock, and, if a combination
thereof, the percentages of the Purchase Price of Debentures in respect of
which it will pay in cash or Common Stock; PROVIDED that the Company will
pay cash for fractional shares of Common Stock. For purposes of
determining the existence of potential fractional interests, all
Debentures subject to purchase by the Company held by a Holder shall be
considered together (no matter how many separate certificates are to be
presented). Each Holder whose Debentures are purchased pursuant to this
Section 1109 shall receive the same percentage of cash or Common Stock in
payment of the Purchase Price for such Debentures, except (i) as provided
in Section 1109(d) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Debentures of a Holder or Holders for Common
Stock because any necessary qualifications or registrations of the Common
Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Debentures of such Holder or Holders for cash.
The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the
Company has given notice thereof to Holders except pursuant to this
Section 1109(b) or Section 1109(d).
At least five Business Days before the Company Notice Date (as
defined below), the Company shall deliver an Officer's Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 1109(e);
(iii) that the conditions to such manner of payment set forth
in Section 1109(d) have or will be complied with; and
(iv) whether the Company desires the Trustee to give the
notice required by Section 1109(e).
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(c) PURCHASE WITH CASH. On the Purchase Date, at the option of the
Company, the Principal Amount at Maturity of the Debentures in respect of
which a Purchase Notice pursuant to Section 1109(a) has been given, or a
specified percentage thereof, may be purchased by the Company with cash
equal to the aggregate Purchase Price of such Debentures.
(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of
the Company, the Principal Amount at Maturity of the Debentures in respect
of which a Purchase Notice pursuant to Section 1109(a) has been given, or
a specified percentage thereof, may be purchased by the Company by the
issuance of a number of shares of Common Stock equal to the quotient
obtained by dividing (i) the amount of cash to which the Holders would
have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price of such Debentures
in cash by (ii) the Market Price of a share of Common Stock, subject to
the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the
current market value of the fractional share. The current market value of
a fraction of a share shall be determined by multiplying the Market Price
by such fraction and rounding the product to the nearest whole cent, with
one-half cent being rounded upward. It is understood that if a Holder
elects to have more than one Debenture purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Debentures to be
purchased.
Upon payment of Common Stock pursuant to the terms hereof, that
portion of accrued Original Issue Discount (or interest, if the Company
has exercised its option provided for in Section 1601) attributable to the
period from the Issue Date (or, if the Company has exercised the option
provided for in Section 1601, the later of (x) the date of such exercise
and (y) the date on which interest was last paid) to the Purchase Date
with respect to the purchased Debenture shall not be cancelled,
extinguished or forfeited, but rather shall be deemed paid in full to the
Holder through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) in exchange for the
Debenture being purchased pursuant to the terms hereof, and the fair
market value of such Common Stock (together with any cash payments in lieu
of fractional shares of Common Stock) shall be treated as issued, to the
extent thereof, first in exchange for the Original Issue Discount accrued
through the Purchase Date, and the balance, if any, of the fair market
value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
purchased pursuant to the provisions hereof.
The Company's right to exercise its election to purchase the
Debentures pursuant to this Section 1109 through the issuance of shares of
Common Stock shall be conditioned upon:
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(i) the Company's not having given notice of an election to
pay entirely in cash and its giving of timely notice of election to
purchase all or a specified percentage of the Debentures with Common
Stock as provided herein;
(ii) the registration of the shares of Common Stock to be
issued in respect of the payment of the Purchase Price under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
each case if required for the initial issuance thereof;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption
from such qualification and registration; and
(iv) the receipt by the Trustee of an Officer's Certificate
and an Opinion of Counsel each stating that (A) the terms of the
issuance of the Common Stock are in conformity with this Indenture
and (B) the shares of Common Stock to be issued by the Company in
payment of the Purchase Price in respect of Debentures have been
duly authorized and, when issued and delivered pursuant to the terms
of this Indenture in payment of the Purchase Price in respect of the
Debentures, will be validly issued, fully paid and nonassessable and
shall be free of any preemptive rights and any lien or adverse claim
(provided that such Opinion of Counsel may state that, insofar as it
relates to the absence of such preemptive rights, liens and adverse
claims, it is given upon the best knowledge of such counsel), and,
in the case of such Officer's Certificate, that conditions (i), (ii)
and (iii) above have been satisfied and, in the case of such Opinion
of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officer's Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of Debentures and the Sale Price of a share of Common Stock on each of the
seven Business Days prior to the Purchase Date. The Company may elect to
pay in Common Stock only if the information necessary to calculate the
Market Price is reported in THE WALL STREET JOURNAL or another Authorized
Newspaper. If such conditions are not satisfied prior to or on the
Purchase Date and the Company has elected to purchase the Debentures
pursuant to this Section 1109 through the issuance of shares of Common
Stock, the Company shall pay, without further notice, the Purchase Price
in cash.
(e) NOTICE OF ELECTION. The Company shall send notices of its
election (the "Company Notice") to purchase with cash or Common Stock or
any combination thereof to the Holders (and to beneficial owners as
required by applicable law) in the manner provided in Section 107. The
Company Notice shall be sent to Holders (and to beneficial owners as
required by applicable law) on a date not less than 20 Business Days prior
to the Purchase Date (such date not less than 20 Business Days prior to
the Purchase Date being herein referred to as the "Company Notice Date").
Such notices shall state the manner of payment elected and shall contain
the following information:
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In the event the Company has elected to pay the Purchase Price (or
any specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a
Market Price determined as of a specified date prior to the Purchase
Date equal to such specified percentage of the Purchase Price of the
Debentures held by such Holder (except for any cash amount to be
paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price; and
(3) state that because the Market Price will be determined
prior to the Purchase Date, Holders will bear the market risk with
respect to the value of the Common Stock to be received from the
date such Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to
be completed by the Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the
Conversion Agent and of the office or agency referred to in Section
1002;
(iii) that Debentures as to which a Purchase Notice has been
given may be converted into Common Stock at any time prior to the
close of business on the applicable Purchase Date only if the
applicable Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;
(iv) that Debentures must be surrendered to the Paying Agent
or to the office or agency referred to in Section 1002 to collect
payment;
(v) that the Purchase Price for any security as to which a
Purchase Notice has been given and not withdrawn will be paid
promptly following the later of the Purchase Date and the time of
surrender of such Debenture as described in clause (iv) above;
(vi) the procedures the Holder must follow to exercise rights
under Section 1109 and a brief description of those rights;
(vii) briefly, the conversion rights of the Debentures and
that Holders who want to convert Debentures must satisfy the
requirements set forth in paragraph 8 of the Debentures; and
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(viii) the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal
pursuant to the terms of Section 1109(a)(1)(D) or Section 1111).
At the Company's written request, the Trustee shall give such notice
in the Company's name and at the Company's expense; PROVIDED, HOWEVER,
that in all cases the text of such notice shall be prepared by the
Company.
Upon determination of the actual number of shares of Common Stock to
be issued for each $1,000 Principal Amount at Maturity of Debentures, the
Company will publish such determination in THE WALL STREET JOURNAL or
other Authorized Newspaper and furnish the Trustee with an affidavit of
publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon purchase of the Debentures shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company shall use reasonable efforts to list or cause to have
quoted any shares of Common Stock to be issued to purchase Debentures on
the principal national securities exchange or over-the-counter or other
domestic market on which any other shares of Common Stock are then listed
or quoted. The Company will promptly inform the Trustee in writing of any
such listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in
respect of a cash purchase under Section 1109(c) or for fractional
interests, as applicable) or shares of Common Stock, or any combination
thereof, as applicable, at the time and in the manner as provided in
Section 1112, sufficient to pay the aggregate Purchase Price of all
Debentures to be purchased pursuant to this Section 1109. As soon as
practicable after the later of the Purchase Date and the date such
Debentures are surrendered to the Paying Agent or at the office or agency
referred to in Section 1002, the Company shall deliver to each Holder
entitled to receive Common Stock through the Paying Agent a certificate
for the number of full shares of Common Stock issuable in payment of the
Purchase Price and cash in lieu of any fractional interests. The person in
whose name the certificate for Common Stock is registered shall be treated
as a holder of record of such Common Stock on the Business Day following
the related Purchase Date. Subject to Section 1109(d), no payment or
adjustment will be made for dividends on the Common Stock the record date
for which occurred prior to the Purchase Date.
(h) TAXES. If a Holder of a Debenture is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of shares of Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the shares of Common
Stock to be issued in a name other than the Holder's name. The Paying
Agent may refuse to deliver the certificates representing the Common Stock
being issued in a name other than the Holder's name until the Paying Agent
receives
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a sum sufficient to pay any tax which will be due, as set forth in an
Officer's Certificate, because the shares of Common Stock are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.
SECTION 1110. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL.
(a) If on or prior to April 24, 2003 there shall have occurred a
Change in Control, Debentures shall be purchased, at the option of the
Holder thereof, by the Company at the purchase price specified in
paragraph 6 of the Debentures (the "Change in Control Purchase Price"), on
the date that is 35 Business Days after the occurrence of the Change in
Control (the "Change in Control Purchase Date"), subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section
1110(c).
(b) Within 15 Business Days after the Change in Control, the Company
shall (i) mail a written notice of such Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law) and (ii) cause a copy of such notice to be
published in THE WALL STREET JOURNAL or other Authorized Newspaper. The
notice shall include a form of Change in Control Purchase Notice to be
completed by the Holder and shall state:
(1) the events causing a Change in Control and the date such
Change in Control is deemed to have occurred for purposes of this
Section 1110;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 1110 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the
Conversion Agent and the office or agency referred to in Section
1002;
(6) the Conversion Rate and any adjustments thereto;
(7) that Debentures with respect to which a Change in Control
Purchase Notice has been given by the Holder may be converted into
Common Stock (or, in lieu thereof, cash, if the Company shall so
elect) at any time prior to the close of business on the Change in
Control Purchase Date only if the Change in Control Purchase Notice
has been withdrawn by the Holder in accordance with the terms of
this Indenture;
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(8) that Debentures must be surrendered to the Paying Agent or
the office or agency referred to in Section 1002 to collect payment;
(9) that the Change in Control Purchase Price for any
Debenture as to which a Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Purchase Date and the time of surrender of such Debenture as
described in clause (8) above;
(10) the procedures the Holder must follow to exercise rights
under this Section 1110 and a brief description of those rights;
(11) briefly, the conversion rights of the Debentures; and
(12) the procedures for withdrawing a Change in Control
Purchase Notice.
(c) A Holder may exercise its rights specified in Section 1110(a)
upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent or to the office or agency referred
to in Section 1002 at any time prior to the close of business on the
Change in Control Purchase Date, stating:
(1) the certificate number of the Debenture which the Holder
will deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the
Debenture which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Debenture shall be purchased on the Change in
Control Purchase Date pursuant to the terms and conditions specified
in paragraph 6 of the Debentures.
Receipt of the Debenture by the Paying Agent prior to, on or after
the Change in Control Purchase Date (together with all necessary
endorsements), at the offices of the Paying Agent or to the office or
agency referred to in Section 1002 shall be a condition to the receipt by
the Holder of the Change in Control Purchase Price therefor; PROVIDED,
HOWEVER, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 1110 only if the Debenture so delivered to the
Paying Agent or such office or agency shall conform in all respects to the
description thereof set forth in the related Change in Control Purchase
Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1110, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions
of this Section 1110 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of
the Change in Control Purchase Date and the date such Debentures are
surrendered to the Paying Agent or at the office or agency referred to in
Section 1002.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or to the office or agency referred to in
Section 1002 the Change in Control Purchase Notice contemplated by this
Section 1110(c) shall have the right to withdraw such Change in Control
Purchase Notice at any time prior to or on the Change in Control Purchase
Date by delivery of a written notice of withdrawal to the Paying Agent or
to such office or agency in accordance with Section 1111.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 1111. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL
PURCHASE NOTICE.
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 1109(a) or Section 1110(c),
as applicable, the Holder of the Debenture in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be,
was given shall (unless such Purchase Notice or Change in Control Purchase
Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such
Debenture. Such Purchase Price or Change in Control Purchase Price shall
be paid to such Holder promptly following the later of (x) the Business
Day following the Purchase Date or the Change in Control Purchase Date, as
the case may be, with respect to such Debenture (provided the conditions
in Section 1109(a) or Section 1110(c), as applicable, have been satisfied)
and (y) the time of delivery of such Debenture to the Paying Agent or to
the office or agency referred to in Section 1002 by the Holder thereof in
the manner required by Section 1109(a) and (g) or Section 1110(c), as
applicable. Debentures in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Purchase Notice or Change in Control Purchase
Notice, as the case may be, unless such Purchase Notice or Change in
Control Purchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent or to the office or agency
referred to in Section 1002 at any time on or prior to the Purchase Date
or the Change in Control Purchase Date, as the case may be, specifying:
(1) the certificate number of the Debenture in respect of
which such notice of withdrawal is being submitted;
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(2) the Principal Amount at Maturity of the Debenture with
respect to which such notice of withdrawal is being submitted; and
(3) the Principal Amount at Maturity, if any, of such
Debenture which remains subject to the original Purchase Notice or
Change in Control Purchase Notice, as the case may be, and which has
been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the
form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the
terms of Section 1109(a)(1)(D) or (ii) a conditional withdrawal containing
the information set forth in Section 1109(a)(1)(D) and the preceding
paragraph and contained in a written notice of withdrawal delivered to the
Paying Agent as set forth in the preceding paragraph.
There shall be no purchase of any Debentures pursuant to Section
1109 (other than through the issuance of Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares of Common
Stock) or Section 1110 if there has occurred (prior to, on or after, as
the case may be, the giving, by the Holders of such Debentures, of the
required Purchase Notice or Change in Control Purchase Notice, as the case
may be) and is continuing an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the
case may be, with respect to such Debentures). The Paying Agent will
promptly return to the respective Holders thereof any Debentures (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice,
as the case may be, has been withdrawn in compliance with this Indenture,
or (y) held by it during the continuance of an Event of Default (other
than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, with respect to such Debentures) in
which case, upon such return, the Purchase Notice or Change in Control
Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
SECTION 1112. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL
PURCHASE PRICE.
Prior to 3:00 p.m. (local time in The City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company is acting as Paying Agent, shall
segregate and hold in trust as provided in Section 1103) an amount of cash
in immediately available funds or securities, if expressly permitted
hereunder, sufficient to pay the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of all the Debentures or
portions thereof which are to be purchased as of the Purchase Date or
Change in Control Purchase Date, as the case may be.
SECTION 1113. DEBENTURES PURCHASED IN PART.
Any Debenture which is to be purchased only in part shall be
surrendered at the office of the Paying Agent or the office or agency
referred to in Section 1002 (with, if the Company
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or the Trustee so requires, due endorsement, or a written instrument of
transfer in form satisfactory to the Company and the Trustee executed by
the Holder or such Holder's attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to
the Holder of such Debenture, without service charge, a new Debenture or
Debentures, of any authorized denomination as requested by such Holder in
aggregate Principal Amount at Maturity equal to, and in exchange for, the
portion of the Principal Amount at Maturity of the Debenture so
surrendered which is not purchased.
SECTION 1114. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE
OF DEBENTURES.
In connection with any offer to purchase or purchase of Debentures
under Section 1109 or 1110, the Company shall (i) comply with Rule 13e-4
and Rule 14e-1 under the Exchange Act, if applicable, (ii) file the
related Schedule 13E-4 (or any successor schedule, form or report) under
the Exchange Act, if applicable, and (iii) otherwise comply with all
Federal and state securities laws regulating the offer and delivery of
shares of Common Stock upon purchase of the Debentures (including
positions of the SEC under applicable no-action letters) so as to permit
the rights and obligations under Sections 1109 and 1110 to be exercised in
the time and in the manner specified in Sections 1109 and 1110.
SECTION 1115. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company, upon
written request, any cash or shares of Common Stock, together with
interest on such cash as hereinafter provided and dividends on such shares
of Common Stock, if any (subject to the provisions of Section 601(a)),
held by them for the payment of a Purchase Price or Change in Control
Purchase Price, as the case may be, of the Debentures that remain
unclaimed as provided in paragraph 12 of the Debentures; PROVIDED,
HOWEVER, that to the extent that the aggregate amount of cash or shares of
Common Stock deposited by the Company pursuant to Section 1112 exceeds the
aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, of the Debentures or portions thereof to be purchased, then
promptly after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any
such excess to the Company together with interest as hereinafter provided
or dividends, if any, thereon (subject to the provisions of Section
601(a)). Any cash deposited with the Trustee or with the Paying Agent
pursuant to Section 1112 hereof shall be invested by the Trustee or Paying
Agent, as applicable, in short-term obligations of, or fully guaranteed
by, the United States of America, or commercial paper rated A-1 or better
by Standard and Poor's Corporation or P-1 or better by Moody's Investors
Service, Inc. as specifically directed in writing by the Company. If the
Company fails to so direct Trustee in writing, Trustee may invest any cash
deposited with it in money market funds (including funds of the Trustee
and its affiliates for which they may receive compensation). Interest
earned on such investments shall be repaid to the Company pursuant to this
Section 1115. Except as provided for in this Section 1115, the Trustee
shall be under no liability for interest on any money received by it
pursuant to this Indenture.
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SECTION 1116. OUTSTANDING DEBENTURES.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Change in Control Purchase Date, or at Stated Maturity, money or, if
permitted by the terms hereof including, without limitation, Section 1109,
securities sufficient to pay the Debentures payable on that date, then on
and after that date such Debentures shall cease to be Outstanding and
Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), on such Debentures
shall cease to accrue and all other rights of the Holder shall terminate
(other than the right to receive the applicable Redemption Price, Purchase
Price or Change in Control Purchase Price, as the case may be, upon
delivery of the Debenture in accordance with the terms of this Indenture);
PROVIDED that if such Debentures are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.
If a Debenture is converted in accordance with Article Fifteen, then
from and after the Conversion Date such Debenture shall cease to be
Outstanding and Original Issue Discount and interest, if any (including,
if such Debentures have been converted to semiannual coupon notes
following the occurrence of a Tax Event, interest on such notes), shall
cease to accrue on such Debenture.
ARTICLE SIX
CONVERSION
SECTION 6.1 CONVERSION.
A new Article Fifteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE FIFTEEN
CONVERSION
SECTION 1501. CONVERSION PRIVILEGE.
A Holder of a Debenture may convert such Debenture into shares of
Common Stock at any time during the period stated in paragraph 8 of the
Debentures. The number of shares of Common Stock issuable upon conversion
of a Debenture per $1,000 of Principal Amount at Maturity thereof (the
"Conversion Rate") shall be that set forth in paragraph 8 in the
Debentures, subject to adjustment as herein set forth.
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A Holder may convert a portion of the Principal Amount at Maturity
of a Debenture if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to conversion of all of a
Debenture also apply to conversion of a portion of a Debenture.
"Average Sale Price" means the average of the Sale Prices of the
Common Stock for the shorter of:
(i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to the
rights, options, warrants or distribution in respect of which the
Average Sale Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights, options or
warrants or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding
through the last full Trading Day prior to the Time of Determination
with respect to the rights, warrants or distribution in respect of
which the Average Sale Price is being calculated, or
(iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next preceding
(a) issuance of rights, warrants, or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of
Section 1506(4), 1507 or 1508 and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to
the rights, warrants, or options or distribution in respect of which
the Average Sale Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto)
with respect to a dividend, subdivision, combination or reclassification
to which Section 1506(1), (2), (3) or (5) applies occurs during the period
applicable for calculating "Average Sale Price" pursuant to the definition
in the preceding sentence, "Average Sale Price" shall be calculated for
such period in a manner determined in good faith by the Board of Directors
to reflect the impact of such dividend, subdivision, combination or
reclassification on the Sale Price of the Common Stock during such period.
"Time of Determination" means the time and date of the earlier of
(i) the determination of stockholders entitled to receive rights,
warrants, or options or a distribution, in each case, to which Sections
1507 and 1508 apply and (ii) the time ("Ex-Dividend Time") immediately
prior to the commencement of "ex-dividend" trading for such rights,
options, warrants or distribution on the New York Stock Exchange or such
other national or regional exchange or market on which the shares of the
Common Stock are then listed or quoted.
SECTION 1502. CONVERSION PROCEDURE.
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To convert a Debenture into Common Stock, a Holder must satisfy the
requirements in paragraph 8 of the Debentures. The date on which the
Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). The Company shall deliver to the Holder no later than
the seventh Business Day following the Conversion Date, through the
Conversion Agent, a certificate for the number of full shares of Common
Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 1503.
The person in whose name the certificate is registered shall be
treated as a shareholder of record on and after the Conversion Date;
PROVIDED, HOWEVER, that no surrender of a Debenture on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the person or persons entitled to receive the shares of Common
Stock upon such conversion as the record holder or holders of such shares
of Common Stock on such date, but such surrender shall be effective to
constitute the person or persons entitled to receive such shares of Common
Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer
books are open; PROVIDED FURTHER, that such conversion shall be at the
Conversion Rate in effect on the date that such Debenture shall have been
surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Debenture, such person shall no
longer be a Holder of such Debenture.
Holders may surrender a Debenture for conversion by means of
book-entry delivery in accordance with paragraph 8 of the Debentures and
the regulations of the applicable book-entry facility.
No payment or adjustment will be made for dividends on any Common
Stock except as provided in this Article Fifteen. On conversion of a
Debenture, that portion of accrued Original Issue Discount (or interest,
if the Company has exercised its option provided for in Section 1601)
attributable to the period from the Issue Date (or, if the Company has
exercised the option provided for in Section 1601, the later of (x) the
date of such exercise and (y) the date on which interest was last paid) to
the Conversion Date with respect to the converted Debenture shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through delivery of the Common Stock
(together with any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any
cash payment in lieu of fractional shares of Common Stock) shall be
treated as issued, to the extent thereof, first in exchange for the
Original Issue Discount accrued through the Conversion Date, and the
balance, if any, of such fair market value of such shares of Common Stock
(and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Debenture being converted pursuant to the provisions
hereof.
If the Holder converts more than one Debenture at the same time, the
number of shares of Common Stock issuable upon the conversion shall be
computed based on the total Principal Amount at Maturity of the Debentures
converted.
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Upon surrender of a Debenture that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Debenture in an authorized denomination equal in Principal
Amount at Maturity to the unconverted portion of the Debenture
surrendered.
If the last day on which a Debenture may be converted is a Legal
Holiday in a place where the Conversion Agent is located, the Debenture
may be surrendered to such Conversion Agent on the next succeeding day
that is not a Legal Holiday.
SECTION 1503. FRACTIONAL SHARES.
The Company will not issue a fractional share of Common Stock upon
conversion of a Debenture. Instead, the Company will deliver cash for the
current market value of the fractional share. The current market value of
a fractional share shall be determined to the nearest 1/1,000th of a share
by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 1504. TAXES ON CONVERSION.
If a Holder converts a Debenture, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock upon such conversion. The Holder, however, shall
pay any such tax that is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may
refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder's name. Nothing
herein shall preclude any tax withholding required by law or regulations.
SECTION 1505. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Debentures hereunder,
and from time to time as may be necessary, reserve out of its authorized
but unissued Common Stock a sufficient number of shares of Common Stock to
permit the conversion of the Debentures for shares of Common Stock.
All shares of Common Stock delivered upon conversion of the
Debentures shall be newly issued shares or treasury shares, shall be duly
and validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and
state securities laws regulating the offer and delivery of shares of
Common Stock upon conversion of Debentures, if any, and will list or cause
to have quoted such shares of Common Stock on
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each national securities exchange or in the over-the-counter market or
such other market on which the Common Stock is then listed or quoted.
SECTION 1506. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If, after the Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock in shares of its Capital Stock (other than Common Stock or
rights, warrants or options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares
of its Capital Stock (other than rights, warrants or options for its
Capital Stock),
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the Holder of a
Debenture thereafter converted may receive the number of shares or other
units of Capital Stock of the Company that such Holder would have owned
immediately following such action if such Holder had converted the
Debenture immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a Holder of a Debenture upon conversion of
such Debenture may receive shares or other units of two or more classes or
series of Capital Stock of the Company, the Conversion Rate shall
thereafter be subject to adjustment upon the occurrence of an action taken
with respect to any such class or series of Capital Stock as is
contemplated by this Article Fifteen with respect to the Common Stock, on
terms comparable to those applicable to Common Stock in this Article
Fifteen.
SECTION 1507. ADJUSTMENT FOR RIGHTS ISSUE.
If, after the Issue Date, the Company distributes any rights,
warrants or options to all holders of its Common Stock entitling them, for
a period expiring within 60 days after the record date for such
distribution, to purchase shares of Common Stock or securities
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convertible into Common Stock at a price per share less than the Sale
Price as of the Time of Determination, the Conversion Rate shall be
adjusted in accordance with the formula:
(O + N)
R1 = R x ---------------
(O + (N x P)/M)
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record
date for the distribution to which this Section 1507 is being
applied.
N = the number of additional shares of Common Stock offered pursuant
to the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 1506(4) applies or (ii) a
distribution to which Section 1508 applies, for which, in each
case, (x) the record date shall occur on or before the record
date for the distribution to which this Section 1507 applies
and (y) the Ex-Dividend Time shall occur on or after the date
of the Time of Determination for the distribution to which this
Section 1507 applies, the fair market value (on the record date
for the distribution to which this Section 1507 applies) of the
(1) Capital Stock of the Company distributed in respect of
each share of Common Stock in such Section 1506(4)
distribution, and
(2) assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the
Company distributed in respect of each share of Common
Stock in such Section 1508 distribution.
The Board of Directors shall determine fair market values for the purposes
of this Section 1507.
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the rights,
warrants or options to which this Section 1507 applies.
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No adjustment shall be made under this Section 1507 if the
application of the formula stated above in this Section 1507 would result
in a value of R1 that is equal to or less than the value of R.
SECTION 1508. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If, after the Issue Date, the Company distributes to all holders of
its Common Stock any of its assets or debt securities or any rights,
warrants or options to purchase securities of the Company (including
securities or cash, but excluding (x) distributions of Capital Stock
referred to in Section 1506 and distributions of rights, warrants or
options referred to in Section 1507 and (y) cash dividends or other cash
distributions that are paid out of consolidated current net income or
earnings retained in the business as shown on the books of the Company,
unless such cash dividends or other cash distributions are Extraordinary
Cash Dividends), the Conversion Rate shall be adjusted, subject to the
provisions of the last paragraph of this Section 1508, in accordance with
the formula:
M
R1 = R x -----
M - F
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to
which Section 1506(4) applies for which (i) the record date
shall occur on or before the record date for the distribution to
which this Section 1508 applies and (ii) the Ex-Dividend Time
shall occur on or after the date of the Time of Determination
for the distribution to which this Section 1508 applies, the
fair market value (on the record date for the distribution to
which this Section 1508 applies) of any Capital Stock of the
Company distributed in respect of each share of Common Stock in
such Section 1506(4) distribution.
F = the fair market value (on the record date for the distribution
to which this Section 1508 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each
share of Common Stock in the distribution to which this Section
1508 is being applied (including, in the case of cash dividends
or other cash distributions giving rise to an adjustment, all
such cash distributed concurrently).
The Board of Directors shall determine fair market values for the purposes
of this Section 1508.
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The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the
distribution to which this Section 1508 applies.
For purposes of this Section 1508, the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Common Stock
the amount of which, together with the aggregate amount of cash dividends
on the Common Stock to be aggregated with such cash dividend in accordance
with the provisions of this paragraph, equals or exceeds the threshold
percentages set forth in items (i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 85 consecutive day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 12.5% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 85 days prior to the date prior to the Ex-Dividend
Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash
dividend with an Ex-Dividend Time occurring in such 85-day period
shall be deemed to be an Extraordinary Cash Dividend and for
purposes of applying the formula set forth above in this Section
1508, the value of "F" shall be equal to (w) the aggregate amount of
such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (x)
the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 1508.
(ii) If upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend, together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 365-consecutive-day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 25% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 365 days prior to the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied), such cash dividend together with each
other cash dividend with an
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Ex-Dividend Time occurring in such 365-day period shall be deemed to
be an Extraordinary Cash Dividend and for purposes of applying the
formula set forth above in this Section 1508, the value of "F" shall
be equal to (y) the aggregate amount of such cash dividend together
with amounts of the other cash dividends with Ex-Dividend Times
occurring in such period minus (z) the aggregate amount of such
other cash dividends with Ex-Dividend Times occurring in such period
for which a prior adjustment in the Conversion Rate was previously
made under this Section 1508.
In making the determinations required by items (i) and (ii) above,
the amount of cash dividends paid on a per share basis and the average of
the Sale Prices, in each case during the period specified in item (i) or
(ii) above, as applicable, shall be appropriately adjusted to reflect the
occurrence during such period of any event described in Section 1506.
In the event that, with respect to any distribution to which this
Section 1508 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is equal to or greater than "M",
then the adjustment provided by this Section 1508 shall not be made and in
lieu thereof the provisions of Section 1514 shall apply to such
distribution.
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SECTION 1509. WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made unless the
adjustment would require an increase or decrease of at least 1% (E.G., if
the Conversion Rate is 4, an increase or decrease of .04 (1% of 4)) in the
Conversion Rate. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Article Fifteen shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be,
with one-half of a cent and 5/10,000ths of a share being rounded upwards.
SECTION 1510. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in Section
1506, 1507, 1508 or 1514 if Holders are to participate in the transaction
on a basis and with notice that the Board of Directors determines to be
fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Debentures become convertible into cash pursuant
to the terms of Section 1508 or 1514, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to
the extent, such adjustment results in the following quotient being less
than the par value of the Common Stock: (i) the Issue Price plus accrued
Original Issue Discount as of the date such adjustment would otherwise be
effective divided by (ii) the Conversion Rate as so adjusted.
SECTION 1511. NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company shall file
with the Trustee and the Conversion Agent a notice of such adjustment and
a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it.
The Conversion Agent will promptly mail such notice to Holders at the
Company's expense. The certificate shall be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall
be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any Holder desiring inspection thereof.
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SECTION 1512. VOLUNTARY INCREASE.
The Company from time to time may increase the Conversion Rate by
any amount and for any period of time; PROVIDED that such period is not
less than 20 Business Days. Whenever the Conversion Rate is increased, the
Company shall mail to Holders and file with the Trustee and the Conversion
Agent a notice of the increase. The Company shall mail the notice at least
15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be
in effect.
A voluntary increase of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of Sections
1506, 1507 or 1508.
SECTION 1513. NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company takes any action that would require an
adjustment in the Conversion Rate pursuant to Section 1506, 1507 or
1508 (unless no adjustment is to occur pursuant to Section 1510); or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 1514; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend
or distribution of the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share
exchange, transfer, liquidation or dissolution. The Company shall file and
mail the notice at least 15 days before such date. Failure to file or mail
the notice or any defect in it shall not affect the validity of the
transaction.
SECTION 1514. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS.
If the Company is a party to a transaction subject to Section 801
(other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately
prior to such transaction do not receive securities, cash or other assets
of the Company or any other person) or a merger or binding share exchange
that reclassifies or changes its outstanding Common Stock, the person
obligated to deliver securities, cash or other assets upon conversion of
Debentures shall enter into a supplemental indenture. If the issuer of
securities deliverable upon conversion of Debentures is an Affiliate of
the successor Company, that issuer shall join in the supplemental
indenture.
The supplemental indenture shall provide that the Holder of a
Debenture may convert it into the kind and amount of securities, cash or
other assets which such Holder would have
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received immediately after the consolidation, merger, binding share
exchange or transfer if such Holder had converted the Debenture
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the
plurality of non-electing Holders. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article Fifteen. The
successor Company shall mail to Holders a notice briefly describing the
supplemental indenture.
If this Section 1514 applies, neither Section 1506 nor 1507 shall
apply.
If the Company makes a distribution to all holders of its Common
Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions
of the last paragraph of Section 1508, would otherwise result in an
adjustment in the Conversion Rate pursuant to the provisions of Section
1508, then, from and after the record date for determining the holders of
Common Stock entitled to receive the distribution, a Holder of a Debenture
that converts such Debenture in accordance with the provisions of this
Indenture shall upon such conversion be entitled to receive, in addition
to the shares of Common Stock into which the Debenture is convertible, the
kind and amount of securities, cash or other assets comprising the
distribution that such Holder would have received if such Holder had
converted the Debenture immediately prior to the record date for
determining the holders of Common Stock entitled to receive the
distribution.
SECTION 1515. COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of Directors must
make pursuant to this Article Fifteen is conclusive.
SECTION 1516. TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article Fifteen should be made, how it should be made or what it should
be. The Trustee has no duty to determine whether a supplemental indenture
under Section 1514 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable
for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Debentures. The Trustee
shall not be responsible for the Company's failure to comply with this
Article Fifteen. Each Conversion Agent (other than the Company or an
Affiliate of the Company) shall have the same protection under this
Section 1516 as the Trustee.
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SECTION 1517. SIMULTANEOUS ADJUSTMENTS.
If this Article Fifteen requires adjustments to the Conversion Rate
under more than one of Sections 1506(4), 1507 or 1508, and the record
dates for the distributions giving rise to such adjustments shall occur on
the same date, then such adjustments shall be made by applying, first, the
provisions of Section 1506, second, the provisions of Section 1508 and,
third, the provisions of Section 1507.
SECTION 1518. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article
Fifteen, any subsequent event requiring an adjustment under this Article
Fifteen shall cause an adjustment to the Conversion Rate as so adjusted.
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 SPECIAL TAX EVENT CONVERSION.
A new Article Sixteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE SIXTEEN
SPECIAL TAX EVENT CONVERSION
SECTION 1601. OPTIONAL CONVERSION TO SEMIANNUAL COUPON NOTE UPON TAX
EVENT.
From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at 4.75% per annum on a principal
amount per Debenture (the "Restated Principal Amount") equal to the Issue
Price plus Original Issue Discount accrued to the date immediately prior
to the Tax Event Date or the date on which the Company exercises the
option described herein, whichever is later (such date, the "Option
Exercise Date"). Such interest shall accrue from the Option Exercise Date
and shall be payable semiannually on April 24 and October 24 of each year
(each an "Interest Payment Date") to holders of record at the close of
business on March 31 or September 30 (each a "Regular Record Date")
immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year comprised of 12 30-day months and
will accrue from the most recent date on which interest has been paid or,
if no interest has been paid, from the Option Exercise Date. Within 15
days of the occurrence of a Tax Event, the Company shall mail a written
notice of such Tax Event by first-class mail to the Trustee.
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ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 GOVERNING LAW.
This First Supplemental Indenture and the Debentures shall be deemed
to be contracts made and to be performed entirely in the State of New York, and
for all purposes shall be governed and construed in accordance with the laws of
said State without regard to the conflicts of laws rules of said State. This
First Supplemental Indenture may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
SECTION 8.2 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this First Supplemental Indenture,
or for or in respect of the recitals contained herein, all of which recitals are
made by the Company solely. To the extent permitted by the provisions of Article
Six of the Indenture, the Trustee shall not be answerable or accountable for
anything whatsoever in connection with this First Supplemental Indenture except
for its own wilful misconduct or negligence.
SECTION 8.3 INTEREST LIMITATIONS.
Anything in this First Supplemental Indenture, the Original
Indenture or any Debenture to the contrary notwithstanding, the Company shall
never be required to pay unearned interest on any Debenture and shall never be
required to pay interest on such Debenture at a rate in excess of the Highest
Lawful Rate, and if the effective rate of interest which would otherwise be
payable under this First Supplemental Indenture, the Original Indenture and such
Debenture would exceed the Highest Lawful Rate, or if the Holder of such
Debenture shall receive any unearned interest or shall receive monies or other
consideration that are deemed to constitute interest which would increase the
effective rate of interest payable by the Company under this First Supplemental
Indenture, the Original Indenture and such Debenture to a rate in excess of the
Highest Lawful Rate, then (i) the amount of interest which would otherwise be
payable by the Company under this First Supplemental Indenture, the Original
Indenture and such Debenture shall be reduced to the amount allowed under
applicable law, and (ii) any unearned interest paid by the Company or any
interest paid by the Company in excess of the Highest Lawful Rate shall, at the
option of the Holder of such Debenture, be either refunded to the Company or
credited on the principal of such Debenture. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received by any Holder under the Debenture held by it, or under
this First Supplemental Indenture or the Original Indenture, shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Debentures all interest (and other consideration deemed to
constitute interest) at any time contracted for, charged or received by such
Holder in connection therewith. If at any time and from time to time (i) the
amount of interest payable to any Holder on any date shall be computed at the
Highest Lawful Rate pursuant to this Section 8.3 and
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(ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Holder would be less than the amount of
interest payable to such Holder computed at the Highest Lawful Rate, then the
amount of interest payable to such Holder in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
until the total amount of interest payable to such Holder shall equal the total
amount of interest which would have been payable to such Holder if the total
amount of interest had been computed without giving effect to this Section 8.3.
For purposes of this Section 8.3, "Highest Lawful Rate" means the maximum
non-usurious rate of interest permitted by applicable law, which the parties
intend shall be the laws of the State of New York; PROVIDED that, to the extent
the Highest Lawful Rate is determined by reference to the laws of the State of
Texas, the Highest Lawful Rate shall be the indicated (weekly) rate ceiling as
defined in Texas Revised Civil Statutes, Article 5069-1.04, as amended, at the
applicable time in effect.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and attested as of the day and year
first above written.
PRIDE INTERNATIONAL, INC.
By:___________________________
Name:
Title:
Attest:
_____________________
MARINE MIDLAND BANK,
as Trustee
By:___________________________
Name:
Title:
Attest:
_____________________
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EXHIBIT A
[FORM OF FACE OF DEBENTURE]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT OF THIS DEBENTURE IS $608.94, THE ISSUE DATE IS APRIL 24, 1998
AND THE YIELD TO MATURITY IS 4.75% (COMPUTED ON A SEMIANNUAL BOND EQUIVALENT
BASIS).
PRIDE INTERNATIONAL, INC.
Zero Coupon Convertible Subordinated
Debenture Due 2018
CUSIP No.
No.
Issue Date: April 24, 1998
Issue Price: $391.06
Original Issue Discount: $608.94
(for each $1,000 Principal
Amount at Maturity)
Pride International, Inc., a Louisiana corporation, promises to pay
to ______________ or registered assigns, the Principal Amount at Maturity of
________________ Dollars on April 24, 2018.
This Debenture shall not bear interest except as specified on the
other side of this Debenture. Original Issue Discount will accrue as specified
on the other side of this Debenture. This Debenture is convertible as specified
on the other side of this Debenture. All capitalized terms used herein without
definition shall have the respective meanings assigned thereto in the Indenture
referred to on the other side of this Debenture.
Additional provisions of this Debenture are set forth on the other
side of this Debenture.
A-1
<PAGE>
Dated: ________ PRIDE INTERNATIONAL, INC.
[SEAL] By: _______________________
Name:
Title:
ATTEST:
__________________________
Name:
Title:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:___________________________
Authorized Officer
A-2
<PAGE>
[FORM OF REVERSE SIDE OF DEBENTURE]
Zero Coupon Convertible Subordinated
Debenture Due 2018
[Unless and until it is exchanged in whole or in part for Debentures
in definitive form, this Debenture may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company, a New York corporation ("DTC"), shall
act as the Depositary until a successor shall be appointed by the Company.
Unless this certificate is presented by an authorized representative of DTC to
the Company or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is 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 therein.]*
1. INTEREST
This Debenture shall not bear interest except as specified in this
paragraph or in paragraph 9 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 502 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of a Purchase Price or Change in Control Purchase
Price pursuant to paragraph 6 hereof or upon the Stated Maturity of this
Debenture) or if shares of Common Stock (or cash in lieu of fractional shares)
in respect of a conversion of this Debenture in accordance with the terms of
Article Fifteen of the Indenture is not delivered when due, then in each such
case the overdue amount shall bear interest at the rate of 4.75% per annum,
compounded semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest shall accrue from the date such overdue
amount was due to the date payment of such amount, including interest thereon,
has been made or duly provided for. All such interest shall be payable on
demand.
Original Issue Discount (the difference between the Issue Price and
the Principal Amount at Maturity of the Debenture), in the period during which a
Debenture remains outstanding, shall accrue at 4.75% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of 12 30-day months,
commencing on the Issue Date of this Debenture, and shall cease to accrue on the
earlier of (a) the date on which the Principal Amount at Maturity hereof or any
portion of such Principal Amount at Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date
or other date on which
- --------
*This paragraph should be added only if the Debenture is issued in global
form.
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<PAGE>
such Original Issue Discount (or, if such Debentures have been converted to
semiannual coupon notes following the occurrence of a Tax Event, interest on
such notes) shall cease to accrue in accordance with Section 1116 of the
Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Pride
International, Inc. (the "Company") will make payments in respect of any
Debenture to the persons in whose name that Debenture is registered at the close
of business on the Business Day preceding the Redemption Date or Stated
Maturity, as the case may be, or at the close of business on a Purchase Date,
Change in Control Purchase Date or Conversion Date, as the case may be. Holders
must surrender Debentures to a Paying Agent to collect such payments in respect
of the Debentures. The Company will pay cash amounts in money of The United
States of America that at the time of payment is legal tender for payment of
public and private debts. The Company will make such cash payments (i) by wire
transfer of immediately available funds with respect to Debentures held in
book-entry form or (ii) by check payable in such money mailed to a Holder's
registered address with respect to any certified Debentures.
3. PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR
Initially, Marine Midland Bank, as trustee (the "Trustee"), will act
as Paying Agent, Conversion Agent and Security Registrar. The Company may
appoint and change any Paying Agent, Conversion Agent, Security Registrar or
co-registrar without notice, other than notice to the Trustee, PROVIDED that the
Company shall maintain in the Borough of Manhattan, The City of New York, an
office or agency of the Security Registrar, Paying Agent or Conversion Agent.
The Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Registrar or co-registrar.
4. INDENTURE
This Debenture is one of a duly authorized series of Securities of
the Company, designated as its Zero Coupon Convertible Subordinated Debentures
Due 2018, issued under an Indenture dated as of April 1, 1998, as amended and
supplemented by a First Supplemental Indenture dated as of April 24, 1998 (as so
amended and supplemented, the "Indenture"), between the Company and the Trustee.
The terms of the Debentures include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended and in effect on the date of the Indenture (the "Trust Indenture Act"),
except as provided in Section 905 of the Indenture. Capitalized terms used
herein or on the face hereof and not defined herein have the meanings ascribed
thereto in the Indenture. The Debentures are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms.
The Debentures are unsecured, subordinated, general obligations of
the Company limited to an aggregate Principal Amount at Maturity specified in
Section 2.2(b) of the Indenture. The Indenture does not limit other indebtedness
of the Company, secured or unsecured, including Senior Indebtedness.
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<PAGE>
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Debentures. The Debentures are
redeemable for cash as a whole at any time, or from time to time in part, at the
option of the Company at the Redemption Prices set forth below, PROVIDED that
the Debentures are not redeemable prior to April 24, 2003.
The table below shows the Redemption Prices of a Debenture per
$1,000 Principal Amount at Maturity on the dates shown below and at Stated
Maturity, which prices reflect the accrued Original Issue Discount calculated
through each such date. The Redemption Price of a Debenture redeemed between
such dates would include an additional amount reflecting the additional Original
Issue Discount accrued from and including the next preceding date in the table
to and including the actual Redemption Date.
ACCRUED ORIGINAL
DEBENTURE ISSUE DISCOUNT REDEMPTION
ISSUE PRICE AT 4.75% PRICE
REDEMPTION DATE (1) (2) (1) + (2)
--------------- ----------- -------------- ----------
April 24, 2003.................... $391.06 $103.46 $494.52
April 24, 2004.................... 391.06 127.23 518.29
April 24, 2005.................... 391.06 152.14 543.20
April 24, 2006.................... 391.06 178.25 569.31
April 24, 2007.................... 391.06 205.61 596.67
April 24, 2008.................... 391.06 234.29 625.35
April 24, 2009.................... 391.06 264.34 655.40
April 24, 2010.................... 391.06 295.85 686.91
April 24, 2011.................... 391.06 328.86 719.92
April 24, 2012.................... 391.06 363.46 754.52
April 24, 2013.................... 391.06 399.73 790.79
April 24, 2014.................... 391.06 437.74 828.80
April 24, 2015.................... 391.06 477.57 868.63
April 24, 2016.................... 391.06 519.32 910.38
April 24, 2017.................... 391.06 563.08 954.14
April 24, 2018.................... 391.06 608.94 1,000.00
If converted to a semiannual coupon note following the occurrence of
a Tax Event, this Debenture will be redeemable at the Restated Principal Amount
plus interest accrued and unpaid from and including the date of such conversion
to, but excluding, the Redemption Date; PROVIDED that in no event will this
Debenture be redeemable prior to April 24, 2003.
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<PAGE>
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Debentures
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to
the Purchase Date until the close of business on the Purchase Date and upon
delivery of the Debentures to the Paying Agent by the Holder as set forth in the
Indenture. Such Purchase Price may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
PURCHASE DATE PURCHASE PRICE
April 24, 2003 $494.52
April 24, 2008 625.35
April 24, 2013 790.79
If prior to a Purchase Date this Debenture has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from, and including, the date of conversion to, but excluding, the
Purchase Date.
Subject to the terms and conditions of the Indenture, if any Change
in Control occurs on or prior to April 24, 2003, the Company shall, at the
option of the Holder, purchase all Debentures for which a Change in Control
Purchase Notice shall have been delivered as provided in the Indenture and not
withdrawn, on the date that is 35 Business Days after the occurrence of such
Change in Control, for a Change in Control Purchase Price equal to the Issue
Price plus accrued Original Issue Discount through and including the Change in
Control Purchase Date, which Change in Control Purchase Price shall be paid in
cash. If prior to a Change in Control Purchase Date this Debenture has been
converted to a semiannual coupon note following the occurrence of a Tax Event,
the Change in Control Purchase Price shall be equal to the Restated Principal
Amount plus accrued and unpaid interest from, and including, the date of
conversion to, but excluding, the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture
prior to the close of business on the Purchase Date or Change in Control
Purchase Date, as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price of all Debentures or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original
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<PAGE>
Issue Discount (or interest upon conversion to semiannual coupon notes following
the occurrence of a Tax Event) ceases to accrue on such Debentures (or portions
thereof) on and after such date, and the Holders thereof shall have no other
rights as such (other than the right to receive the Purchase Price or Change in
Control Purchase Price, as the case may be, upon surrender of such Debenture).
7. NOTICE OF REDEMPTION
Notice of redemption will be given in the manner provided in the
Indenture not less than 30 days nor more than 60 days prior to the Redemption
Date. If money sufficient to pay the Redemption Price of all Debentures (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, from and after such Redemption
Date, Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), ceases to accrue on such
Debentures or portions thereof. Debentures in denominations larger than $1,000
of Principal Amount at Maturity may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a
Debenture may convert it into Common Stock of the Company at any time before the
close of business on April 24, 2018; PROVIDED, HOWEVER, that if a Debenture is
called for redemption, the Holder may convert it at any time before the close of
business on the Redemption Date. The number of shares of Common Stock to be
delivered upon conversion of a Debenture into Common Stock per $1,000 of
Principal Amount at Maturity shall be equal to the Conversion Rate. A Debenture
in respect of which a Holder has delivered a Purchase Notice or Change in
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Debenture may be converted only if the notice of
exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 13.794 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section
1601 of the Indenture to have interest in lieu of Original Issue Discount accrue
on the Debenture following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the Company
exercises such option, Debentures surrendered for conversion during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business of such Interest Payment Date
(except Debentures to be redeemed on a date within such period) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Debentures surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Debentures will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
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<PAGE>
To convert a Debenture a Holder must (i) complete and manually sign
the conversion notice on the back of the Debenture (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion Agent
(or the office or agency referred to in Section 1002 of the Indenture) or, if
applicable, complete and deliver to The Depository Trust Company ("DTC" or the
"Depositary," which term includes any successor thereto) the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, (ii) surrender the Debenture to a Conversion Agent by
physical or book-entry delivery (which is not necessary in the case of
conversion pursuant to the Depositary's book-entry conversion program), (iii)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (iv) pay any transfer or
similar tax, if required. Book-entry delivery of a Debenture to the Conversion
Agent may be made by any financial institution that is a participant in the
Depositary; conversion through the Depositary's book-entry conversion program is
available for any security that is held in an account maintained at the
Depositary by any such participant.
A Holder may convert a portion of a Debenture if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000.
No payment or adjustment will be made for dividends on the Common Stock, except
as provided in the Indenture. On conversion of a Debenture, that portion of
accrued Original Issue Discount (or interest, if the Company has exercised its
option provided for in paragraph 9 hereof) attributable to the period from the
Issue Date (or, if the Company has exercised the option referred to in paragraph
9 hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid) to the Conversion Date with respect to the converted
Debenture shall not be cancelled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through delivery of the Common
Stock (together with any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) shall be treated as
issued, to the extent thereof, first in exchange for the Original Issue Discount
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for (i) dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock of
the Company, (ii) subdivisions, combinations or certain reclassifications of
Common Stock, (iii) distributions to all holders of Common Stock of certain
rights, warrants or options to purchase Common Stock or securities convertible
into Common Stock for a period expiring within 60 days after the applicable
record date for such distribution at a price per share less than the Sale Price
at the Time of Determination and (iv) distributions to such holders of assets or
debt securities of the Company or certain rights, warrants or options to
purchase securities of the Company (excluding certain cash dividends or other
cash distributions). However, no adjustment need be made if Holders may
participate in the transaction or in certain other cases. The Company from time
to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding
share exchange of the type specified in the Indenture, or certain transfers of
all or substantially all of its assets to another
A-8
<PAGE>
person, or in certain other circumstances described in the Indenture, the right
to convert a Debenture into Common Stock may be changed into a right to convert
it into the kind and amount of securities, cash or other assets that the Holder
would have received if the Holder had converted such Holder's Debentures
immediately prior to such transaction.
9. TAX EVENT
From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount shall accrue at 4.75% per annum on a principal amount per
Debenture (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued to the date immediately prior to the Tax Event
Date or the date on which the Company exercises the option described herein,
whichever is later (such date, the "Option Exercise Date"). Such interest shall
accrue from the Option Exercise Date and shall be payable semiannually on April
24 and October 24 of each year (each an "Interest Payment Date") to holders of
record at the close of business on March 31 or September 30 (each a "Regular
Record Date") immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year composed of 12 30-day months and will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Option Exercise Date.
Interest on any Debenture that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Debenture is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. The Company will make such payments (i) by wire transfer of
immediately available funds with respect to Debentures held in book-entry form
or (ii) by check payable in such money mailed to a Holder's registered address
with respect to any certified Debentures.
Except as otherwise specified with respect to the Debentures, any
interest on any Debenture that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company as provided for in Section 307 of
the Indenture.
10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Debentures called for redemption, unless surrendered for
conversion before the Redemption Date, may be deemed to be purchased from the
Holders of such Debentures at an amount not less than the Redemption Price,
together with accrued interest, if any, to the Redemption Date, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Debentures from the Holders and to make payment for such
Debentures to the Trustee in trust for such Holders.
11. DENOMINATIONS; TRANSFER; EXCHANGE
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<PAGE>
The Debentures are in fully registered form, without coupons, in
minimum denominations of $1,000 Principal Amount at Maturity or in integral
multiples thereof. A Holder may transfer or exchange Debentures in accordance
with the Indenture. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Security
Registrar need not transfer or exchange any Debentures selected for redemption
(except, in the case of a Debenture to be redeemed in part, the portion of the
Debenture not to be redeemed) or any Debentures in respect of which a Purchase
Notice or Change in Control Purchase Notice has been given and not withdrawn
(except, in the case of a Debenture to be purchased in part, the portion of the
Debenture not to be purchased) or any Debentures for a period of 15 days before
a selection of Debentures to be redeemed.
12. PERSONS DEEMED OWNERS
The registered Holder of this Debenture may be treated as the owner
of this Debenture for all purposes.
13. UNCLAIMED MONEY FOR SECURITIES
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of any amount with respect to the
Debentures and remaining unclaimed for three years after such amounts have
become due and payable shall be paid to the Company on Company Request (unless
otherwise required by mandatory provisions of the applicable escheat or
abandoned or unclaimed property law), or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Debenture shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in The Borough of Manhattan, The
City of New York, and in such other Authorized Newspapers as the Trustee shall
deem appropriate, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will
(unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law) be repaid to the Company.
14. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Debentures may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Debentures at the time Outstanding and (ii) certain defaults or noncompliance
with certain provisions may be waived with the written consent of the Holders of
a majority in aggregate Principal Amount at Maturity of the Debentures at the
time Outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any
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<PAGE>
Holder, the Company and the Trustee may amend or supplement the Indenture or the
Debentures in certain respects set forth in the Indenture.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) if the Debentures
have been converted to semiannual coupon notes following the occurrence of a Tax
Event, default in the payment of interest that continues for a period of 30
days; (ii) default in the payment of the Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to any
Debenture when the same becomes due and payable; (iii) default in the delivery
of shares of Common Stock (or cash in lieu of fractional interests in shares of
Common Stock) in accordance with the terms of the Indenture when such Common
Stock or cash is required to be delivered following conversion of a Debenture
and such default is not remedied for a period of 10 days; (iv) default in the
performance or breach of any covenant of the Company in the Indenture or the
Debentures, subject to notice and lapse of time; or (v) certain events of
bankruptcy, insolvency or reorganization of the Company. If an Event of Default
occurs and is continuing, either the Trustee or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Debentures at the time Outstanding
may declare all the Debentures to be due and payable immediately. The principal
amount of the Debentures that may be declared due and payable in such event
shall be the Issue Price plus accrued Original Issue Discount (or if the
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, the Restated Principal Amount, plus accrued and
unpaid interest) on the Debentures to and including the date of default or the
date of declaration, as the case may be. Certain events of bankruptcy or
insolvency are Events of Default that will result in the Debentures becoming due
and payable immediately upon the occurrence of such Events of Default.
As set forth in, and subject to the provisions of, the Indenture, no
holder of any Debenture shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless certain
conditions set forth in the Indenture have been satisfied. The Trustee may
refuse to enforce the Indenture or the Debentures unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in
aggregate Principal Amount at Maturity of the Outstanding Debentures shall have
the right to direct the time, method and place of conducting certain
proceedings, or exercising any trust or power conferred on the Trustee.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Debentures and may otherwise deal with the
Company with the same rights it would have if it were not Trustee.
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<PAGE>
17. NO RECOURSE AGAINST OTHERS
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Debentures or the obligations of the Company or the Trustee under the Indenture
or any certificate or other writing delivered in connection therewith.
18. SUBORDINATION
Indebtedness evidenced by the Debentures is subordinated, to the
extent and in the manner provided in the Indenture, to the prior payment in full
of all Senior Indebtedness of the Company, whether outstanding at the date of
this Indenture or thereafter created, incurred, assumed or guaranteed. There is
no restriction under the Indenture on the Company's incurring additional
indebtedness, including Senior Indebtedness. The Company, and each Holder by
accepting a Debenture, agrees to the subordination provided in the Indenture and
that the subordination provisions are for the benefit of the holders of Senior
Indebtedness.
Each Holder of a Debenture by his acceptance hereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
the Indenture and to protect the rights of the Holders of the Debentures
pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Debentures
in the form required in said proceedings and cause said claim to be approved.
19. AUTHENTICATION
This Debenture shall not be valid until an authorized officer of the
Trustee manually signs the Certificate of Authentication on the other side of
this Debenture.
20. 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 UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
21. GOVERNING LAW
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
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<PAGE>
22. INTEREST LIMITATIONS
Anything in this Debenture or in the Indenture to the contrary
notwithstanding, the Company shall never be required to pay unearned interest on
this Debenture and shall never be required to pay interest on this Debenture at
a rate in excess of the Highest Lawful Rate.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture which has in it the text of this
Debenture in larger type. Requests may be made to:
Pride International, Inc.
c/o Marine Midland Bank
New York, New York 10005
Attention: Corporate Trust Department
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<PAGE>
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
________________________________
(Insert assignee's soc.
sec. or tax ID no.)
________________________________
________________________________
________________________________
________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________ agent to transfer this Debenture on the
books of the Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company, check the box:
[ ]
To convert only part of this Debenture, state the Principal Amount at Maturity
to be converted (which must be $1,000 or an integral multiple of $1,000):
$______________
If you want the share certificate made out in another person's name, fill in the
form below:
________________________________
(Insert other person's soc. sec. or tax ID no.)
________________________________
________________________________
________________________________
________________________________
(Print or type other person's name, address and zip code)
Date:__________ Your Signature:___________________________________
(Sign exactly as your name appears on
the face of this Debenture)
Signature Guarantee:___________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
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<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE DEBENTURES*
The following exchanges of a part of this Global Debenture for
Definitive Debentures have been made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
AMOUNT OF AMOUNT OF AT MATURITY OF THIS
DECREASE IN INCREASE IN GLOBAL DEBENTURE SIGNATURE OF
PRINCIPAL AMOUNT AT PRINCIPAL AMOUNT AT FOLLOWING AUTHORIZED OFFICER
MATURITY OF THIS MATURITY OF THIS SUCH DECREASE OF TRUSTEE OR
DATE OF EXCHANGE GLOBAL DEBENTURE GLOBAL DEBENTURE (OR INCREASE) SECURITY CUSTODIAN
------------------ ------------------- ------------------- -------------------- ------------------
<S> <C>
</TABLE>
- ----------------
* To be included in a Global Debenture.
A-15
EXHIBIT 8.1
[BAKER & BOTTS LETTERHEAD]
April 20, 1998
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
Gentlemen:
As set forth in the final prospectus supplement dated April 20, 1998
(the "Prospectus Supplement"), which includes a prospectus dated March 23, 1998
included in the Registration Statement on Form S-3 (Registration No. 333-44925),
as amended, filed by you with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to a proposed public offering (the "Offering") by the Company of
Zero Coupon Convertible Subordinated Debentures Due 2018 (the "Debentures"),
certain legal matters in connection with the Offering are being passed upon for
you by us. At your request, this opinion of counsel is being furnished to you
for filing as Exhibit 8.1 to the Company's current report on Form 8-K (the "Form
8-K"). Defined terms used in the Prospectus Supplement have the same meaning
when used herein.
It is our opinion that the discussion in the Prospectus Supplement
which is contained under the caption "CERTAIN FEDERAL INCOME TAX CONSEQUENCES,"
insofar as concerns conclusions of law, is an accurate general description,
subject to the assumptions, qualifications, and limitations set forth therein,
of the material federal income tax consequences of the ownership and disposition
of the Debentures.
Pursuant to the provisions of Rule 436(a) of the Rules and
Regulations of the Commission under the Securities Act, we hereby consent to the
inclusion as aforesaid of our opinion of counsel under the caption "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus Supplement, to the reference
to our Firm under the caption "LEGAL MATTERS" in the Prospectus Supplement and
to the filing of this opinion with the Commission as an exhibit to the Form 8-K.
In giving such consent, we do not admit that we are within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
-----------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
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MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Charles E. Bauer
Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-1792
(Name, address and telephone number of agent for service)
PRIDE INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)
Louisiana 76-0069030
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Pride International, Inc. Robert W. Randall
5847 San Felipe, Suite 3300 Pride International, Inc.
Houston, Texas, 77057 5847 San Felipe, Suite 3300
(713) 789-1400 Houston, Texas, 77057
(Address, including zip code, and (713) 789-1400
telephone number, including area code, (Name, Address, including zip code,
of registrant's principal executive and telephone number, including
offices) area code, of agent for service)
DEBT SECURITIES
(Title of Indenture Securities)
<PAGE>
General
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None
<PAGE>
Item 16. LIST OF EXHIBITS.
EXHIBIT
T1A(I) * - Copy of the Organization Certificate of
Marine Midland Bank.
T1A(ii) * - Certificate of the State of New York
Banking Department dated December 31,
1993 as to the authority of Marine Midland
Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine
Midland Bank as adopted on January 20,
1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank required
by Section 321(b) of the Trust Indenture
Act of 1939.
T1A(vii) - Copy of the latest report of condition of
the trustee (December 31, 1997), published
pursuant to law or the requirement of its
supervisory or examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange Commission with
Registration No. 33-53693 and incorporated herein by reference thereto.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York on the 17th day of April, 1998.
MARINE MIDLAND BANK
By:/s/ SUSAN BARSTOCK
Susan Barstock
Assistant Vice President
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
EXHIBIT T1A (VII)
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 2000
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Please refer to page I,
Table of Contents, for the [ 1 ]
required disclosure of
estimated burden.
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</TABLE>
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND
FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31,
1997
This report is required by law; 12 U.S.C. ss.324 (State member banks); 12 U.S.C.
ss. 1817 (State nonmember banks); and 12 U.S.C. ss.161 (National banks).
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National Banks.
I, GERALD A. RONNING, EXECUTIVE VP & CONTROLLER
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are true
to the best of my knowledge and believe.
/s/ GERALD A. RONNING
Signature of Officer Authorized to Sign Report
1/26/98
Date of Signature
(971231)
(RCRI 9999)
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it has
been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
/s/ MALCOLM BURNETT
Director (Trustee)
/s/ BERNARD J. KENNEDY
Director (Trustee)
/s/ SAL H. ALFIERO
Director (Trustee)
SUBMISSION OF REPORTS
Each Bank must prepare its Reports of Condition and Income either:
(a) in automated formand then file the computer data file directly with the
banking agencies' collection agent, Electronic Data System Corporation
(EDS), by modem or computer diskette; or
(b) in hard-copy (paper) form and arrange for another party to convert the
paper report to automated for. That party (if other than EDS) must transmit
the bank's computer data file to EDS
To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page to the
hard-copy f the completed report that the bank places in its files.
- --------------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
(RCRI 9030)
<PAGE>
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
December 31, 1997
ASSETS
Thousands
of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances
currency and coin ...................................... $ 928,754
Interest-bearing balances ................................ 2,571,410
Held-to-maturity securities .............................. 0
Available-for-sale securities ............................ 3,968,837
Federal funds sold and securities purchased
under agreements to resell ............................. 497,992
Loans and lease financing receivables:
Loans and leases net of unearned
income ................................................. 21,550,115
LESS: Allowance for loan and lease
losses ................................................. 407,355
LESS: Allocated transfer risk reserve .................... 0
Loans and lease, net of unearned
income, allowance, and reserve ......................... 21,142,760
Trading assets ........................................... 979,454
Premises and fixed assets (including
capitalized leases) .................................... 225,646
Other real estate owned ..................................... 8,092
Investments in unconsolidated
subsidiaries and associated companies ..................... 0
Customers' liability to this bank on
acceptances outstanding ................................... 24,795
Intangible assets ........................................... 479,713
Other assets ................................................ 488,168
Total assets ................................................ 31,315,621
<PAGE>
LIABILITIES
Deposits:
In domestic offices ...................................... 20,072,724
Noninterest-bearing ...................................... 4,090,858
Interest-bearing ......................................... 15,981,866
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs .................................... 3,834,827
Noninterest-bearing ...................................... 0
Interest-bearing ......................................... 3,834,827
Federal funds purchased and securities sold
under agreements to repurchase ........................... 2,007,482
Demand notes issued to the U.S. Treasury .................... 192,186
Trading Liabilities ....................................... 215,748
Other borrowed money:
With a remaining maturity of one year
or less ................................................ 1,402,449
With a remaining maturity of more than
one year through three years ........................... 63,601
With a remaining maturity of more than
three years ............................................ 61,707
Bank's liability on acceptances
executed and outstanding .................................. 24,795
Subordinated notes and debentures ........................... 497,774
Other liabilities ........................................... 719,423
Total liabilities ........................................... 29,092,716
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common Stock ................................................ 205,000
Surplus ..................................................... 1,984,326
Undivided profits and capital reserves ...................... 8,678
Net unrealized holding gains (losses)
on available-for-sale securities .......................... 24,901
Cumulative foreign currency translation
adjustments ............................................... 0
Total equity capital ........................................ 2,222,905
Total liabilities, limited-life
preferred stock, and equity capital ....................... 31,315,621
