SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): MAY 21, 1999
PRIDE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 1-13289 76-0069030
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5847 SAN FELIPE, 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 May 21, 1999, Pride International, Inc. (the "Company") entered
into an Underwriting Agreement dated May 21, 1999 (the "Underwriting Agreement")
with Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette Securities
Corporation relating to the offering by the Company of $200,000,000 aggregate
principal amount of 10% Senior Notes due 2009 (the "Notes") under its
Registration Statement on Form S-3 (Registration No. 333-44925). The Notes will
be issued under an Indenture, dated as of May 1, 1997 (the "Indenture"), between
the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), as amended
and supplemented by the Second Supplemental Indenture thereto between the
Company and the Trustee (the "Supplemental Indenture"). Each of (i) the
Underwriting Agreement, (ii) the Indenture, (iii) the form of Supplemental
Indenture and (v) the Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of the Trustee on Form T-1 is being filed or incorporated
by reference as an exhibit to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
1.1 -- Underwriting Agreement dated May 21, 1999 between the Company
and Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation
4.1 -- Indenture, dated as of May 1, 1997, between the Company and
the Trustee (incorporated by reference to Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, File Nos. 0-16961 and 1-13289)
4.2 -- Form of Second Supplemental Indenture between the Company and
the Trustee, including the form of Note
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank on Form T-1
-2-
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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/ROBERT W. RANDALL
Robert W. Randall
Vice President and General Counsel
Date: May 25, 1999
-3-
EXHIBIT 1.1
EXECUTION COPY
Pride International, Inc.
10% Senior Notes due 2009
Underwriting Agreement
New York, New York
May 21, 1999
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Pride International, Inc., a corporation organized under the laws of
Louisiana (the "Company"), proposes to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, the principal amount of its securities identified
in Schedule I hereto (the "Securities"), to be issued under an indenture (the
"Original Indenture") dated as of May 1, 1997, as amended and supplemented by
the Second Supplemental Indenture thereto to be dated as of May 26, 1999 (the
Original Indenture, as so amended and supplemented, the "Indenture"), between
the Company and The Chase Manhattan Bank, as trustee (the "Trustee"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. Any reference herein to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
as the case may be, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 16 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration
statement (the
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2
file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of
the offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: (1) after the Effective Date of
such registration statement, a final prospectus supplement relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statement, an amendment to such
registration statement (including the form of final prospectus supplement)
or (3) a final prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As
filed, such final prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective Date
and on the Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final Prospectus, if
not filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit 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; PROVIDED, HOWEVER, that the
Company makes no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
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(c) 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 Final
Prospectus.
(d) The Securities 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 Securities will
conform to the description thereof in the Registration Statement and the
Final Prospectus.
(e) 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
Final 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").
(f) 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, 1998 or is described in the Registration Statement as having
been acquired after December 31, 1998. Each of the Company's subsidiaries
listed on Schedule III 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 Final 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
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registration or qualification, except where the failure so to register or
qualify does not have a Material Adverse Effect.
(g) 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 or as otherwise disclosed in the Final
Prospectus. All such shares are fully paid and nonassessable, and, except
as disclosed in the Final 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"). Except as disclosed in
the Final Prospectus, 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.
(h) Neither the Company nor any Subsidiary is in violation of or in
default under (a) its certificate or articles of incorporation or bylaws,
or other organizational documents, 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 Final
Prospectus or to be filed as an exhibit to the Registration Statement is
not so described or filed as required.
(i) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(j) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement and the 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
Securities under the Act, qualification of the Indenture under the Trust
Indenture 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
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5
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.
(k) Except as disclosed in the Final 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 Final 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
Securities, suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any Preliminary Prospectus or the Final
Prospectus or prevents or suspends the sale of the Securities in any of
the jurisdictions that you may have specified pursuant to Section 5(e)
hereof; no action, suit or proceeding before any court or arbitrator or
any governmental body, agency or official (domestic or foreign), is
pending against or, to the knowledge of the Company, threatened against,
the Company or any Subsidiary that, if adversely determined, could
reasonably be expected to (a) interfere with or adversely affect the
issuance of the Securities or (b) in any manner invalidate this Agreement;
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 Final Prospectus or otherwise has been
complied with in all material respects.
(l) The accountants, PricewaterhouseCoopers LLP, 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.
(m) The consolidated financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Final 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 Final 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.
(n) Except as disclosed in the Registration Statement or the Final
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
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6
(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.
(o) Except as otherwise set forth in the Final 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 Final 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 Final Prospectus or
in a document filed as an exhibit to the Registration Statement. All the
property described in the Final 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.
(p) 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
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement, the Preliminary Final Prospectus, the Final Prospectus or other
materials, if any, permitted by the Act.
(q) 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 Final Prospectus, subject to such qualifications as may
be set forth in the Final 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 Final Prospectus; and, except as described in the Final
Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company and any of the Subsidiaries
considered as a whole.
(r) 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.
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(s) 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.
(t) 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.
(u) 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 Final 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.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to
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each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule I hereto
the principal amount of the Securities set forth opposite such Underwriter's
name in Schedule II hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities
shall be made on the date and at the time specified in Schedule I hereto, which
date and time may be postponed by agreement between the Representatives and the
Company (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Basic Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Final Prospectus is
otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will promptly
advise the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when the
Final Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Final Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
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9
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3)
supply any supplemented Final Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed or conformed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto as
the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to the
offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering; 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 that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject.
(f) The Company will not, without the prior written consent of
Salomon Smith Barney Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or
any person in privity with the Company or any affiliate of the Company)
directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange
Act, any debt securities issued or guaranteed by the Company (other than
the Securities) or publicly announce an
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intention to effect any such transaction until the Business Day set forth
on Schedule I hereto.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Sher Garner Cahill
Richter Klein McAlister & Hilbert, L.L.C., counsel for the Company, to
have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of
Louisiana and has the corporate power and authority to own and lease
its properties and to conduct its business as described in the Final
Prospectus;
(ii) The Company has the corporate power and authority to
enter into and perform this Agreement and to issue, sell and deliver
the Securities; this Agreement and the Indenture have been duly and
validly authorized by all necessary corporate action by the Company
and have been duly executed and delivered by the Company;
(iii) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and have
been duly executed and delivered by the Company; and
<PAGE>
11
(iv) Neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other
of the transactions herein contemplated nor the fulfillment of the
terms hereof will (A) conflict with, result in a breach or violation
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 By-Laws of the Company as in effect on
the date of the opinion.
(c) The Company shall have requested and caused Dancia Penn & Co.,
British Virgin Islands counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of Petrodrill Four Limited, Petrodrill Five Limited,
Petrodrill Six Limited and Petrodrill Seven Limited (the "BVI
Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the British Virgin
Islands and has the corporate power and authority to own and lease
its properties and to conduct its business as described in the Final
Prospectus;
(ii) Each of the BVI Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; and
(iii) All the outstanding shares of capital stock of each BVI
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and (A) 30% of the outstanding shares
of capital stock of the BVI Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries and (B) except
for liens and security interests relating to indebtedness described
in the Final Prospectus, such shares are owned free and clear of any
perfected security interest and, to the knowledge of such counsel,
any other security interest, claim, lien or encumbrance.
(d) The Company shall have requested and caused McKinney, Bancroft &
Hughes, Bahamas counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of Martin Maritime Limited and Andre Maritime Ltd.
(the "Bahamas Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Bahamas and has the corporate power and authority to own and lease
its properties and to conduct its business as described in the Final
Prospectus;
(ii) Each of the Bahamas Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification except
to the extent that
<PAGE>
12
the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken
as a whole; and
(iii) All the outstanding shares of capital stock of each
Bahamas Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable and (A) 51% of the outstanding
shares of capital stock of the Bahamas Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries and (B)
except for liens and security interests relating to indebtedness
described in the Final Prospectus, such shares are owned free and
clear of any perfected security interest and, to the knowledge of
such counsel, any other security interest, claim, lien or
encumbrance.
(e) The Company shall have requested and caused Baker & McKenzie and
Brons & Salas, Venezuelan and Argentine counsel for the Company,
respectively, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect
that:
(i) Each of Pride International, S.A., Pride International,
C.A. and Pride Drilling, C.A. (the "South American 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 is business as described in the Final
Prospectus;
(ii) Each of the South American Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; and
(iii) All the outstanding shares of capital stock of each
South American Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding shares
of capital stock of the South American Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free
and clear of any perfected security interest and, to the knowledge
of such counsel, any other security interest, claim, lien or
encumbrance.
(f) The Company shall have requested and caused Jean Paul Henderson,
Associate General Counsel of Pride Forasol, S.A., to have furnished to the
Representatives his opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of Pride-Forasol, S.A. and Pride Foramer, S.A. (the
"Forasol 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
<PAGE>
13
its properties and to conduct its business as described in the Final
Prospectus;
(ii) Each of the Forasol Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; and
(iii) All the outstanding shares of capital stock of each
Forasol Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, all outstanding shares of capital
stock of the Forasol Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such counsel,
any other security interest, claim, lien or encumbrance.
(g) The Company shall have requested and caused Baker & Botts,
L.L.P., counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) The Securities conform to the description thereof
contained in the Final Prospectus;
(ii) The Indenture has been duly qualified under the Trust
Indenture Act, and the Indenture (assuming due authorization,
execution and delivery thereof by the Company and the Trustee) is,
and the Securities (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 the Indenture and this Agreement will,
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms,
except to the extent such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general principles
of equity (whether considered in a proceeding in equity or at law)
and to the discretion of the court before which any proceeding
therefor may be brought;
(iii) The Registration Statement has become effective under
the Act; any required filing of any Preliminary Final Prospectus and
the Final 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); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been instituted or
threatened by the Commission, and the Registration Statement, at the
Effective Time, and the Final Prospectus, as of its issue date and
on the Closing Date (except in each case, the financial
<PAGE>
14
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) appear on their face to comply
as to form in all material respects with the applicable requirements
of the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder;
(iv) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary or their respective property, of a
character required to be disclosed in the Registration Statement
which is not disclosed in the Final Prospectus, and 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 Final Prospectus, or to
be filed as an exhibit thereto other than those described therein or
filed or incorporated by reference as exhibits thereto;
(v) The Company is not, and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be
an "investment company" as defined in the Investment Company Act of
1940, as amended;
(vi) To the knowledge of such counsel, no consent, approval,
authorization, filing with or order of any court or governmental
agency or body is required to be obtained by the Company in
connection with the sale by the Company of the Securities to the
Underwriters, except as such as have been obtained under the Act and
the Trust Indenture Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Final Prospectus and such
other approvals (specified in such opinion) as have been obtained;
and
(vii) Neither the execution and delivery by the Company of the
Indenture, the issue and sale by the Company of the Securities, nor
the performance of the Company's obligations pursuant to this
Agreement and the Indenture will conflict with, result in a breach
or violation 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 which (i) relates to indebtedness of the Company or (ii) is
filed or incorporated by reference as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1998, or
the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, (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.
<PAGE>
15
(h) The Company shall have requested and caused Robert W. Randall,
Vice President and General Counsel for the Company, to have furnished to
the Representatives his opinion, dated the Closing Date and addressed to
the Representatives, 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 is business as described in the Final 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 the outstanding shares of capital stock of each U.S.
Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
U.S. Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, any other
security interest, claim, lien or encumbrance;
(iv) Neither the issuance and sale by the Company of the
Securities 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;
(v) 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;
(vi) 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 business in the
manner described in the Final 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 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 Final Prospectus; and
<PAGE>
16
(vii) To the knowledge of such counsel, neither the execution
and delivery of the Indenture by the Company, the issue and sale by
the Company of the Securities, nor the performance of the Company's
obligations pursuant to this Agreement and the Indenture will (A)
conflict with, result in a breach or violation of, or constitute a
default under the terms of any material indenture or other material
agreement or instrument to which the Company or any 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 of 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.
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 of the Company, representatives of the
Underwriters and counsel to the Underwriters at which the contents of the
Registration Statement and the Final Prospectus were discussed and,
although such counsel did not independently verify such information and is
not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Final Prospectus, on the basis of the foregoing (relying
as to factual matters upon the statements of officers and other
representatives of the Company and State officials and as to materiality
in part upon statements of officers and other representatives of the
Company) 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 auditor's reports thereon and the
related schedules and the other financial, numerical, statistical and
accounting data included or incorporated by reference therein, or omitted
therefrom, and the exhibits thereto, as to which such counsel need not
comment) as of its effective date 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 not
misleading, or that the Final Prospectus (other than the financial
statements, the notes thereto and the auditor's reports thereon and the
related schedules and the other financial, numerical, statistical and
accounting data included or incorporated by reference therein, or omitted
therefrom, and the exhibits thereto, as to which such counsel need not
comment) as of its issue date or 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 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 Sher Garner Cahill Richter Klein McAlister &
Hilbert, L.L.C. shall be limited to the laws of the State of Louisiana.
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
<PAGE>
17
shall be limited to the laws of the jurisdiction in which the foreign
Subsidiary with respect to which such opinion is given is organized.
(i) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(j) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplements to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened by the Commission; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(k) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at
the Execution Time and at the Closing Date, letters, (which may refer to
letters previously delivered to one or more of the Representatives), dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the three-month
period ended March 31, 1999, and as at March 31,
<PAGE>
18
1999, in accordance with Statement on Auditing Standards No. 71, and
stating in effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference
in the Registration Statement and the Final Prospectus and reported
on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act
and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the three-month period
ended March 31, 1999 and as at March 31, 1999, as indicated in their
report dated May 14, 1999 incorporated by reference in the
Registration Statement and the Final Prospectus; carrying out
certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and audit committees of the
Company and the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to December 31, 1998, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act
and with the related rules and regulations adopted by the
Commission with respect to financial statements included or
incorporated by reference in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated by reference in the Registration
Statement and the Final Prospectus;
(2) with respect to the period subsequent to March 31,
1999, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the stockholders' equity
of the Company as compared with the amounts shown on the March
31, 1999 consolidated balance sheet included or incorporated
by reference in the Registration Statement and the Final
Prospectus, or for the period from April 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding quarter in revenues,
earnings from operations or earnings before income taxes of
the Company
<PAGE>
19
and its subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(3) the information included or incorporated by
reference in the Registration Statement and Final Prospectus
in response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information), Item
402 (Executive Compensation) and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including information set
forth under the captions "Summary", "Selected Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Description of Business" in the Final
Prospectus, the information included or incorporated by reference in
Items 1, 2, 6, 7 and 11 of the Company's Annual Report on Form 10-K,
incorporated by reference in the Registration Statement and the
Final Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated by reference in the Company's
Quarterly Reports on Form 10- Q, incorporated by reference in the
Registration Statement and the Final Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial information included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma
financial statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe that
the pro forma financial statements do not comply as to form in all
material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements.
References to the Final Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
(l) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment
<PAGE>
20
thereof) and the Final Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (k) of this Section 6 (other
than any change or decrease specified in such letter or letters specified
at the Execution Time) or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Final Prospectus (exclusive of any supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(m) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(n) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Baker & Botts, L.L.P., counsel for the Company at 910
Louisiana, Houston, TX, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through Salomon Smith Barney Inc. on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of one underwriters' counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and
<PAGE>
21
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have and
(ii) with respect to any untrue statement or omission of a material fact made in
any Preliminary Final Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of any Underwriter (or any of the
directors, officers, employees, and agents of such Underwriter or any
controlling person of such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities concerned, to the
extent that any such loss, claim, damage, or liability of such Underwriter
occurs under the circumstances where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment (with the burden of
proof resting with the Company) that (w) the Company had previously furnished
copies of the Final Prospectus to the Underwriters, (x) delivery of the Final
Prospectus was required by the Act to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Preliminary Final
Prospectus was corrected in the Final Prospectus and (z) there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the Final Prospectus.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity, and will reimburse the Company and such other persons for any legal
or other expense reasonably incurred by the Company or such other persons in
connection with investigating or defending any such action or claim as such
expenses are incurred. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting" or "Plan of
Distribution", (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
<PAGE>
22
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Final Prospectus and
the Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary Final
Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall not be liable under this Section 8 to any
indemnified party regarding any settlement or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
is consented to by such indemnifying party, which consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate
<PAGE>
23
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on the
other from the offering of the Securities; PROVIDED, HOWEVER, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
<PAGE>
24
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Salomon Smith Barney
Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Robert W. Randall, General Counsel (fax no.: (713) 952-6916) and confirmed to it
at 5847 San Felipe, Suite 3300, Houston, Texas, 77057, attention of the Legal
Department.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder. No purchaser of Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
13. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
14. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
15. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
16. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the
rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
<PAGE>
25
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
" Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
<PAGE>
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among 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
Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
By: Salomon Smith Barney Inc.
By:/S/ MARK RENTON
Name: Mark Renton
Title: Managing Director
For themselves and the other several Underwriters, if any, named in Schedule II
to the foregoing Agreement.
<PAGE>
SCHEDULE I
Underwriting Agreement dated May 21, 1999
Registration Statement No. 333-44925
Representative(s): Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Title, Purchase Price and Description of Securities:
Title: 10% Senior Notes due 2009
Principal amount: $200,000,000
Purchase price (include accrued
interest or amortization, if
any): 97.625%
Sinking fund provisions: None
Redemption provisions: Redeemable at the Company's option at the
times and prices specified in the Final Prospectus.
Other provisions: As provided in the Indenture.
Closing Date, Time and Location: May 26, 1999 at 10:00 a.m. at Baker & Botts,
L.L.P., 910 Louisiana, Houston, TX
Type of Offering: Non-delayed
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s): May 26, 1999
Modification of items to be covered by the letter from
PricewaterhouseCoopers LLP delivered pursuant to
Section 6(e) at the Execution Time: None
<PAGE>
SCHEDULE II
PRINCIPAL AMOUNT
OF SECURITIES TO
UNDERWRITERS BE PURCHASED
- ------------ ----------------
Salomon Smith Barney Inc. $ 140,000,000
Donaldson, Lufkin & Jenrette Securities Corporation 60,000,000
----------------
Total ......................... $ 200,000,000
================
<PAGE>
SCHEDULE III
Pride Offshore, Inc. (Delaware)
Pride International, Ltd. (British Virgin Islands)
Pride International, S.A. (Argentina)
Pride Drilling C.A. (Venezuela)
Pride International C.A. (Venezuela)
Pride Colombia S.A. (British Virgin Islands)
Pride International Holdings, Inc. (Delaware)
Forasub B.V. (Netherlands)
Pride-Forasol S.A. (France)
Al-Jazirah Forasol Drilling Corp. (Liberia)
Pride-Foramer S.A. (France)
Forafels Inc. (Panama)
Hispano Americano de Petroleos SA (Argentina)
Somaser SNC (France)
National Drilling & Services, Inc. (Oman)
Forinter Ltd. (Jersey)
Dupont Maritime Ltd. (Liberia)
Durand Maritime Ltd. (Liberia)
Martin Maritime Limited (Bahamas)
Andre Maritime Ltd. (Bahamas)
EXHIBIT 4.2
- ------------------------------------------------------------------------------
PRIDE INTERNATIONAL, INC.
and
THE CHASE MANHATTAN BANK
Trustee.
---------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of _______ ___, 1999
---------------------
Supplementing the Indenture
dated as of
May 1, 1997
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE SUPPLEMENT OF THE ORIGINAL INDENTURE..............................1
SECTION 1.1. Supplement to Article One of the Original Indenture........1
SECTION 1.2. Supplement to Article Four of the Original Indenture......15
SECTION 1.3. Supplement to Article Five of the Original Indenture......15
SECTION 1.4. Supplement to Article Eight of the Original Indenture.....16
SECTION 1.5. Supplement to Article Nine of the Original Indenture......18
SECTION 1.6. Supplement to Article Ten of the Original Indenture.......18
SECTION 1.7. Supplement to Article Eleven of the Original Indenture....28
SECTION 1.8. New Article Fourteen......................................29
SECTION 1.9. Effect of Article One.....................................33
ARTICLE TWO THE NOTES........................................................33
ARTICLE THREE REPRESENTATIONS OF THE COMPANY.................................34
SECTION 3.1. Authority of the Company..................................34
SECTION 3.2. Truth of Recitals and Statements..........................34
ARTICLE FOUR CONCERNING THE TRUSTEE..........................................34
SECTION 4.1. Acceptance of Trusts......................................34
SECTION 4.2. No Responsibility of Trustee for Recitals, etc............34
ARTICLE FIVE MISCELLANEOUS PROVISIONS........................................34
SECTION 5.1. Relation to this Indenture................................34
SECTION 5.2. Meaning of Terms..........................................34
SECTION 5.3. Counterparts of Supplemental Indenture....................34
SECTION 5.4. Governing Law.............................................35
- ii -
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of ______ ___, 1999, between
Pride International, Inc., a Louisiana corporation formerly known as Pride
Petroleum Services, Inc. (the "Company"), and The Chase Manhattan Bank, as
Trustee (the "Trustee") under the Original Indenture referred to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture of even
date herewith (the "Original Indenture") pursuant to which the Securities are
issuable;
WHEREAS, Sections 201 and 901 of the Original Indenture provide that the
form or terms of any series of Securities may be established in an Indenture
supplemental thereto, and the Company desires to establish in this Second
Supplemental Indenture both the form and terms of a series of Securities
designated as its 10% Senior Notes due 2009 (the "Notes");
WHEREAS, Section 901 of the Original Indenture further provides that under
certain conditions the Company and Trustee, may, without the consent of any
Holders, from time to time and at any time, enter into an Indenture or
Indentures supplemental thereto, for the purposes, INTER ALIA, of adding to the
covenants of the Company for the benefit of the Holders of all or any series of
Securities, and adding any additional Events of Default, and the Company desires
by means of this Second Supplemental Indenture to add to its covenants for the
sole benefit of the Holders of the Notes and to add certain additional Events of
Default, also solely for the benefit of such Holders; and
WHEREAS, all things necessary to authorize the execution and delivery of
this First Supplemental Indenture, to establish the Notes as provided for in
this Second Supplemental Indenture, and to make the Original Indenture, as
supplemented by this Second Supplemental Indenture (the Original Indenture, as
so supplemented by this Supplemental Indenture, being sometimes referred to
herein as the "Indenture"), a valid agreement of the Company, in accordance with
its terms, have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that for and in consideration of the premises and the purchase of the Notes by
the Holders, the Company and the Trustee mutually covenant and agree, solely for
the equal and proportionate benefit of the respective Holders from time to time
of the Notes, as follows:
ARTICLE ONE
SUPPLEMENT OF THE ORIGINAL INDENTURE
SECTION 1.1.SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE. Section
101 of the Original Indenture is supplemented or superseded with respect to the
Notes, in the case of definitional paragraphs that may be inconsistent, by
inserting therein, in alphabetical order, the following definitional paragraphs:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the Fair Value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
- 1 -
<PAGE>
"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction other than a Sale
and Lease-Back Transaction that results in the creation or incurrence of (a) a
Capital Lease Obligation of the Company or any Subsidiary or (b) a lease of
newly acquired, improved, upgraded or constructed assets, which lease is treated
as an operating lease in accordance with GAAP and entered into within 180 days
of the later of commencement of commercial operations of such assets and
completion of such acquisition, improvement, upgrade or construction) by the
Company or any Subsidiary to any Person other than the Company or a Wholly Owned
Subsidiary, in one transaction, or a series of related transactions, of (i) any
Capital Stock of any Subsidiary (except for directors' qualifying shares or
certain minority interests sold to other Persons solely due to local law
requirements that there be more than one stockholder, but which are not in
excess of what is required for such purpose) or (ii) any other Property of the
Company or any Subsidiary, other than (A) sales of drill-string components and
obsolete or worn out equipment in the ordinary course of business or other
assets that, in the Company's reasonable judgment, are no longer used or useful
in the conduct of the business of the Company and its Subsidiaries, (B) any
drilling contract, charter (bareboat or otherwise) or other lease of Property
entered into by the Company or any Subsidiary in the ordinary course of
business, other than any Bargain Purchase Contract, (C) a Permitted Investment
or Restricted Payment permitted under Section 1009 hereof, (D) a Change of
Control, (E) a consolidation, merger or the disposition of all or substantially
all of the assets of the Company in compliance with Section 801 hereof, (F) any
trade or exchange by the Company or any Subsidiary of one or more drilling rigs
for one or more drilling rigs or other vessels or equipment for one or more
other Replacement Assets owned or held by another Person, PROVIDED that (x) the
Fair Value of the Property traded or exchanged by the Company or such Subsidiary
(including cash or cash equivalents to be delivered by the Company or such
Subsidiary) is reasonably equivalent to the Fair Value of the drilling rig or
rigs acquired (together with cash or cash equivalents to be received by the
Company or such Subsidiary), as determined by written appraisal by a nationally
(or industry) recognized investment banking firm or appraisal firm and (y) such
exchange is approved by a majority of the disinterested directors of the Company
and (G) any transfers that, but for this clause (G), would be Asset Sales, if
(y) the Company elects to designate such transfers as not constituting Asset
Sales and (z) after giving effect to such transfers, the aggregate Fair Market
Value of the Property or assets transferred in such transaction or any such
series of related transactions so designated by the Company does not exceed
$1,000,000. An Asset Sale shall include the requisition of title to, seizure of
or forfeiture of any Property or assets, or any actual or constructive total
loss or an agreed or compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, (1) if the Sale and Lease-Back
Transaction is a Capital Lease Obligation, the amount of Indebtedness
represented thereby according to the definition of "Capital Lease Obligation"
and (2) in all other instances, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease (or to the
first date on which the lessee is permitted to terminate such lease without the
payment of a penalty) included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
- 2 -
<PAGE>
"Average Life" means, as of any date, with respect to any debt security or
preferred stock, the quotient obtained by dividing (i) the sum of the products
of (x) the number of years from such date to the date of each scheduled
principal payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security or preferred stock multiplied in each case
by (y) the amount of such principal payment by (ii) the sum of all such
principal payments.
"Bargain Purchase Contract" means a drilling contract, charter (bareboat
or otherwise) or lease that provides for acquisition of Property by the other
party to such agreement during or at the end of the term thereof for less than
Fair Market Value thereof at the time such right to acquire such Property is
granted.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP. For purposes of Section 1015, a Capital
Lease Obligation shall be deemed secured by a Lien on the Property being leased.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
an equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person, the
aggregate consideration received for such Asset Sale by such Person in the form
of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof). For purposes of this
definition, "cash or cash equivalents" shall be deemed to include, for a period
not to exceed 12 months from the related Asset Sale, noncash consideration
received with respect to an Asset Sale to the extent that such noncash
consideration consists of (i) publicly traded debt securities of a Person, which
securities are rated as "BBB-" or higher by Standard & Poor's Ratings Services
("S&P") and "Baa3" or higher by Moody's Investors Service, Inc. ("Moody's"), or
(ii) other Indebtedness of a Person if (x) the lowest rated long-term, unsecured
debt obligation issued by such Person is rated "BBB-" or higher by S&P and
"Baa3" or higher by Moody's or (y) in the case of other Indebtedness, the
payment of such other Indebtedness is secured by an irrevocable letter of credit
issued by a commercial bank having capital and surplus in excess of $100 million
and long-term unsecured debt obligations rated at least "A-" by S&P and "A3" by
Moody's.
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")) has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the Voting Stock of the Company; (ii) the Company is merged
with or into or consolidated with another corporation and, immediately after
giving effect to the merger or consolidation, less than 50% of the outstanding
voting securities entitled to vote generally in the election of directors or
persons who serve similar functions of the surviving or resulting entity are
then beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if the record date has been set to
determine the stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date; (iii) the
Company, either individually or in conjunction with one or more Subsidiaries,
sells, conveys, transfers or leases, or the Subsidiaries sell, convey, transfer
or lease, all or substantially all of the assets of the Company and the
Subsidiaries, taken as a whole (either in one transaction or a
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series of related transactions), including Capital Stock of the Subsidiaries, to
any Person (other than a Wholly Owned Subsidiary or a newly formed entity having
substantially the same shareholders, directly or indirectly, as the Company with
holdings in substantially the same proportion as such shareholders' holdings in
the Company); (iv) the liquidation or dissolution of the Company; or (v) the
first day on which a majority of the individuals who constitute the Board of
Directors are not Continuing Directors.
"Consolidated Current Liabilities" of any Person means, as of any date,
the total liabilities (including tax and other proper accruals) of such Person
and its subsidiaries (other than Non-Recourse Subsidiaries) on a consolidated
basis at such date which may properly be classified as current liabilities in
accordance with GAAP, after eliminating (1) all intercompany items between such
Person and its subsidiaries (other than Non-Recourse Subsidiaries) or between
subsidiaries (other than Non-Recourse Subsidiaries) and (2) all current
maturities of long-term Indebtedness.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company for the latest four fiscal quarters for which financial
information in respect thereof is available immediately prior to the applicable
Transaction Date (the "Determination Period") to (ii) the aggregate Consolidated
Interest Expense of the Company that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of, and interest payments in respect of, Indebtedness of the
Company and its consolidated Subsidiaries expected by the Company to be
outstanding on the Transaction Date and reasonably anticipated by the Company to
be outstanding from time to time during such period), assuming for the purposes
of this measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date, PROVIDED that if the Company or any of its consolidated
Subsidiaries is a party to any Interest Swap Obligation which would have the
effect of changing the interest rate on any Indebtedness of the Company or any
of its consolidated Subsidiaries for such four-quarter period (or a portion
thereof), the resulting rate shall be used for such four-quarter period or
portion thereof; PROVIDED, HOWEVER, that any Consolidated Interest Expense of
the Company with respect to Indebtedness incurred or retired by the Company or
any of its Subsidiaries during the fiscal quarter in which the Transaction Date
occurs shall be calculated as if such Indebtedness was so incurred or retired on
the first day of the fiscal quarter in which the Transaction Date occurs;
PROVIDED, FURTHER, that if the transaction giving rise to the need to calculate
the Consolidated Interest Coverage Ratio would have the effect of increasing or
decreasing EBITDA in the future and if such increase or decrease is readily
quantifiable and is directly attributable to such transaction, EBITDA shall be
calculated on a pro forma basis as if such transaction had occurred on the first
day of the four fiscal quarters referred to in clause (i) of this definition,
and if, during the same four fiscal quarters, (x) the Company or any of its
consolidated Subsidiaries shall have engaged in any Asset Sale, EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive), or
increased by an amount equal to the EBITDA (if negative), directly attributable
to the assets which are the subject of such Asset Sale for such period
calculated on a pro forma basis as if such Asset Sale and any related retirement
of Indebtedness had occurred on the first day of such period or (y) the Company
or any of its consolidated Subsidiaries shall have acquired any material assets
other than in the ordinary course of business, EBITDA and Consolidated Interest
Expense (if Indebtedness is incurred or assumed in connection with such
acquisition) shall be calculated on a pro forma basis as if such acquisition and
related financing had occurred on the first day of such period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, (A) the sum of (i) the aggregate amount of cash and
noncash interest expense (including capitalized interest) of such Person and its
subsidiaries (other than Non-Recourse Subsidiaries) for
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such period as determined on a consolidated basis in accordance with GAAP in
respect of Indebtedness (including, without limitation, (v) any amortization of
debt discount, (w) net costs associated with Interest Swap Obligations
(including any amortization of discounts), (x) the interest portion of any
deferred payment obligation, (y) all accrued interest and (z) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers acceptances or similar facilities paid or accrued, or scheduled to be
paid or accrued, during such period other than in respect of Non-Recourse
Indebtedness); (ii) dividends on preferred stock of such Person (and preferred
stock of its subsidiaries (other than Non-Recourse Subsidiaries) if paid to a
Person other than such Person or its subsidiaries) declared and payable in cash;
(iii) the portion of any rental obligation of such Person or its subsidiaries
(other than Non-Recourse Subsidiaries) in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (iv) the
portion of any rental obligation of such Person or its subsidiaries (other than
Non-Recourse Subsidiaries) in respect of any Sale and Lease-Back Transaction
allocable to interest expense (determined as if such were treated as a Capital
Lease Obligation); and (v) to the extent any debt of any other Person is
guaranteed by such Person or any of its subsidiaries (other than Non-Recourse
Subsidiaries), (A) the aggregate amount of interest paid, accrued or scheduled
to be paid or accrued, by such other Person during such period attributable to
any such debt, LESS (B) to the extent included in (A) above, amortization or
writeoff of deferred financing costs of such Person and its subsidiaries during
such period and any charge related or any premium or penalty paid in connection
with redeeming or retiring any Indebtedness of such Person and its subsidiaries
prior to its stated maturity; in the case of both (A) and (B) above, after
elimination of intercompany accounts among such Person and its subsidiaries and
as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, PROVIDED that there shall be excluded therefrom, without duplication,
(i) any net income of any Non-Recourse Subsidiary, except that the Company's or
any Subsidiary's equity in the net income of such Non-Recourse Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or cash equivalents actually distributed by such
Non-Recourse Subsidiary during such period to the Company or such subsidiary as
a dividend or other distribution, (ii) gains and losses from Asset Sales or
reserves relating thereto, (iii) items classified as extraordinary (other than
the tax benefit, if any, of the utilization of net operating loss carryforwards
or alternative minimum tax credits), (iv) in the case of any computation of
Consolidated Net Income for purposes of determining compliance with Section
1009, the net income of any Person acquired by such specified Person (other than
a Non-Recourse Subsidiary) or any of its subsidiaries in a pooling-of-interests
transaction for any period prior to the date of such acquisition, (v) any gain
or loss, net of taxes, realized on the termination of any employee pension
benefit plan, (vi) the net income of any subsidiary of such specified Person to
the extent that the transfer to that Person of that income is not at the time
permitted, directly or indirectly, by any means (including by dividend,
distribution, advance or loan or otherwise), by operation of the terms of its
charter or any agreement with a Person other than with such specified Person,
instrument held by a Person other than by such specified Person, judgment,
decree, order, statute, law, rule or governmental regulations applicable to such
subsidiary or its stockholders, except for any dividends or distributions
actually paid by such subsidiary to such Person, (vii) the cumulative effect of
changes in accounting principles, and (viii) non-cash compensation expense for
management stock options and other incentive or benefit plans.
"Consolidated Net Tangible Assets" of any Person means, as of any date,
Consolidated Tangible Assets of such Person at such date, after deducting
therefrom (without duplication of deductions) all Consolidated Current
Liabilities of such Person at such date.
"Consolidated Net Worth" of any Person means, as of any date, the sum of
the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person
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<PAGE>
and its subsidiaries on a consolidated basis at such date, each item determined
in accordance with GAAP, less amounts attributable to Redeemable Stock of such
Person or any of its subsidiaries.
"Consolidated Tangible Assets" of any Person means, as of any date, the
consolidated assets of such Person and its Subsidiaries at such date, after
eliminating intercompany items and after deducting from such total (i) the net
book value of all assets that would be classified as intangibles under GAAP
(including, without limitation, goodwill, organizational expenses, trademarks,
trade names, copyrights, patents, licenses and any rights in any thereof) and
(ii) any prepaid expenses, deferred charges and unamortized debt discount and
expense, each such item determined in accordance with GAAP.
"Continuing Director" means an individual who (i) is a member of the Board
of Directors of the Company and (ii) either (A) was a member of the Board of
Directors of the Company on the Issue Date or (B) whose nomination for election
or election to the Board of Directors of the Company was approved by vote of at
least 66 2/3% of the directors then still in office who were either directors on
the Issue Date or whose election or nomination for election was previously so
approved.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Determination Period" has the meaning specified under clause (i) of the
definition of "Consolidated Interest Coverage Ratio."
"Drillship Credit Facilities" means the Loan Agreement, dated as of
December 23, 1998, among Pride International, Inc., Compagnie Financiere de CIC
et de L'Union Europeenne and the Lenders set forth on Schedule I thereto,
relating to the Pride Angola drillship and the Loan Agreement, dated as of
December 23, 1998, among Pride International, Inc., Compagnie Financiere de CIC
et de L'Union Europeenne and the Lenders set forth on Schedule I thereto,
relating to the Pride Africa drillship.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such person, for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, and (v) any other non-cash charges.
"Fair Market Value" means, with respect to consideration received or to be
received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Fair Value" means, with respect to any asset or Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"Funded Indebtedness" means all Indebtedness incurred under any revolving
credit, letter of credit or working capital facility that matures by its terms,
or that is renewable at the option of any obligor therein to a date more than
one year after the date on which such Indebtedness is originally incurred.
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<PAGE>
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; PROVIDED,
HOWEVER, that all calculations made for purposes of determining compliance with
the provisions set forth in Articles 8 and 10 hereof shall utilize GAAP in
effect at the Issue Date.
"Indebtedness" as applied to any Person means, at any time, without
duplication, (i) any obligation of such Person, contingent or otherwise, for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) any obligation of such
Person for all or any part of the purchase price of Property or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable included in current liabilities incurred in respect of Property and
services purchased in the ordinary course of business; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable incurred in the ordinary course of business); (v) any
obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property (other than accounts payable incurred
in the ordinary course of business); (vi) any obligation of such Person issued
or assumed as the deferred purchase price of Property (other than accounts
payable incurred in the ordinary course of business); (vii) any Capital Lease
Obligation; (viii) any obligation of any other Person secured by (or for which
the obligee thereof has an existing right, contingent or otherwise, to be
secured by) any Lien on Property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person, the amount of such
obligation being deemed to be the lesser of the value of such Property or the
amount of the obligation so secured; (ix) any obligation of such Person in
respect of any letter of credit supporting any obligation of any other Person;
(x) the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any preferred stock of such Person); (xi)
any Interest Swap Obligation or Currency Hedge Obligation of such Person; and
(xii) any obligation which is in economic effect a guarantee, regardless of its
characterization (other than an endorsement in the ordinary course of business
or any performance guarantee), with respect to any Indebtedness of another
Person, to the extent guaranteed. For purposes of the preceding sentence, the
maximum fixed repurchase price of any Redeemable Stock or subsidiary preferred
stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Stock or subsidiary preferred stock
as if such Redeemable Stock or subsidiary preferred stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture; PROVIDED, HOWEVER, that if such Redeemable Stock or subsidiary
preferred stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock or subsidiary preferred stock.
The amount of Indebtedness of any Person at any date shall be (x) the
outstanding book value at such date of all unconditional obligations as
described above and (y) the maximum liability of any such contingent obligation
at such date.
"Interest Swap Obligations" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means with respect to any Person, any investment in another
Person, whether by means of a share purchase, capital contribution, loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures or prepayments or deposits in the
ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person or any guarantee of Indebtedness of any other
Person; PROVIDED, HOWEVER, that the term "Investment" shall not include any
transaction involving the purchase or other acquisition
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<PAGE>
(including by way of merger) of Property (including Capital Stock) by the
Company or any Subsidiary in exchange for Capital Stock (other than Redeemable
Stock) of the Company. The amount of any Person's Investment shall be the
original cost of such Investment to such Person, PLUS the cost of all additions
thereto paid by such Person, and MINUS the amount of any portion of such
Investment repaid to such Person in cash as a repayment of principal or a return
of capital, as the case may be, but without any other adjustments for increases
or decreases in value, or writeups, writedowns or writeoffs with respect to such
Investment in determining the amount of any investment involving a transfer of
any Property other than cash, such Property shall be valued at its Fair Value at
the time of such transfer as determined in good faith by the board of directors
(or comparable body) of the Person making such transfer.
"Issue Date" means the date on which the Notes are first authenticated and
delivered under this Indenture.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Limited Recourse Indebtedness" means (i) Indebtedness with respect to the
two drilling/workover barge rigs owned by the Company's Venezuelan Subsidiary as
in effect on the Issue Date (the "Venezuelan Barge Financing"), (ii)
Indebtedness with respect to two drillships owned by certain Non-Recourse
Subsidiaries as in effect on the Issue Date (the "Angola/Africa Drillship
Financing") and (iii) Indebtedness incurred to finance the purchase,
acquisition, renovation or construction of capital assets and related items
(including interest added to principal), or refinancings thereof, (a) in respect
of which the recourse of the holder of such Indebtedness is effectively limited
to such capital assets and related items or (b) in which the recourse and
security are similar to (or more favorable to the Company and its Subsidiaries
than) the Venezuelan Barge Financing or the Angola/Africa Drillship Financing.
"Maturity" means the date on which the principal of a Note becomes due and
payable as provided therein or in this Indenture, whether at the Stated Maturity
or by declaration of acceleration or otherwise.
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of (i) all legal
and title expenses, commissions and other fees and expenses incurred, (ii) all
Federal, state, provincial, foreign, recording and local taxes payable as a
consequence of such Asset Sale, (iii) all payment made to any Person other than
the Company or a Subsidiary on any Indebtedness which is secured by such assets,
in accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale,
(iv) as for any Asset Sale by a Subsidiary, the equity interest in such Cash
Proceeds of any holder of Capital Stock of such Subsidiary (other than the
Company or any other Subsidiary) and (v) appropriate amounts to be provided by
the Company or any Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset Sale and
retained by the Company or any Subsidiary, as the case may be, after such Asset
Sale including pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale and (b) as to any
Bargain Purchase Contract, an amount equal to (i) that portion of the rental or
other payment stream arising under a Bargain Purchase Contract that represents
an amount in excess of the Fair Market Value of the rental or other payments
with respect to the pertinent
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Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amounts set forth in clause (a) above, in
each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the Company
nor any other Subsidiary (i) provides credit support including any undertaking,
agreement or instrument which would constitute Indebtedness or (ii) is directly
or indirectly liable for such Indebtedness and (b) no default with respect to
such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against a Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or its Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"Non-Recourse Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination will be designated a Non-Recourse Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of a
Non-Recourse Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company as a Non-Recourse Subsidiary so long as (a) neither
the Company nor any Subsidiary is directly or indirectly liable pursuant to the
terms of any Indebtedness of such Subsidiary subject to the proviso described
below; (b) no default with respect to any Indebtedness of such Subsidiary would
permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Company or any Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; (c) neither the Company nor any Subsidiary has made an
Investment in such Subsidiary unless such Investment was made pursuant to, and
in accordance with, Section 1009 hereof (other than Investments of the type
described in clause (i) of the definition of "Permitted Investments"); and (d)
such designation shall not result in the creation or imposition of any Lien on
any Property of the Company or any Subsidiary (other than any Permitted Lien or
any Lien the creation or imposition of which shall have been in compliance with
Section 1015 hereof); PROVIDED, HOWEVER, that with respect to clause (a), the
Company or a Subsidiary may be liable for Indebtedness of a Non-Recourse
Subsidiary if (x) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 1009 hereof, in each case at the time of
incurrence, or (y) the liability would be a Permitted Investment at the time of
designation of such Subsidiary as a Non-Recourse Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. The Board of Directors of the Company may designate any
Non-Recourse Subsidiary as a Subsidiary if, immediately after giving effect to
such designation, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Company could incur $1.00 of additional Indebtedness (not
including the incurrence of Permitted Indebtedness) under the first paragraph of
Section 1010 hereof and (iii) if any Property of the Company or any of its
Subsidiaries would upon such designation become subject to any Lien (other than
a Permitted Lien), the creation or imposition of such Lien shall have been in
compliance with Section 1015 hereof.
"Notes" means the 10% Senior Notes due 2009.
"Offered Notes" means $200,000,000 aggregate principal amount of the Notes
to be issued and sold on May 26, 1999.
"Permitted Indebtedness" means (a) Indebtedness of the Company under the
Offered Notes; (b) Indebtedness (and any guarantee or pledge thereof) under one
or more bank revolving credit facilities, as amended, extended, replaced or
refunded from time to time, in an aggregate principal amount at any one time
outstanding not to exceed the greater of (A) $100 million and (B) an amount
equal to 10% of Consolidated Net Tangible Assets determined as of the date of
the incurrence of such Indebtedness (plus interest and fees under such
facilities), less any amounts derived from Asset
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<PAGE>
Sales and applied to the permanent reduction of Indebtedness thereunder (and a
permanent reduction of the related commitment to lend thereunder) as
contemplated by Section 1013 hereof; (c) Indebtedness of the Company or any
Subsidiary under Interest Swap Obligations, PROVIDED that (i) such Interest Swap
Obligations are related to payment obligations on Indebtedness otherwise
permitted under the covenants described in Section 1010 hereof and (ii) the
notional principal amount of such Interest Swap Obligations does not exceed the
principal amount of the Indebtedness to which such Interest Swap Obligations
relate; (d) Indebtedness of the Company or any Subsidiary under Currency Hedge
Obligations, PROVIDED that (i) such Currency Hedge Obligations are related to
payment obligations on Indebtedness otherwise permitted under the covenants
described in Section 1010 hereof or to the foreign currency cash flows
reasonably expected to be generated by the Company and the Subsidiaries and (ii)
the notional principal amount of such Currency Hedge Obligations does not exceed
the principal amount of the Indebtedness and the amount of the foreign currency
cash flows to which such Currency Hedge Obligations relate; (e) Indebtedness of
the Company or any Subsidiary outstanding on the Issue Date; (f) the Subsidiary
Guarantees of the Notes and any assumption of the obligations guaranteed thereby
or subsidiary guarantees of the Senior Notes due 2007 (if such guarantees are
required by the indenture governing such Notes); (g) Indebtedness of the Company
or any Subsidiary in respect of bid performance bonds, surety bonds, appeal
bonds and letters of credit or similar arrangement issued for the account of the
Company or any Subsidiary, in each case in the ordinary course of business; (h)
Indebtedness of the Company to any Wholly Owned Subsidiary (but only so long as
it remains a Wholly Owned Subsidiary); (i) Indebtedness of any Subsidiary to the
Company or any Wholly Owned Subsidiary (but only so long as it remains a Wholly
Owned Subsidiary); (j) Indebtedness of the Company in connection with a purchase
of the Notes pursuant to a Change of Control Offer, PROVIDED that the aggregate
principal amount of such Indebtedness does not exceed 101% of the aggregate
principal amount of the Notes purchased pursuant to such Change of Control Offer
plus the related expenses of such purchase; PROVIDED, FURTHER, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Notes and (B) does not mature prior to one year following
the Stated Maturity of the Notes; (k) Permitted Refinancing Indebtedness
incurred with respect to Indebtedness incurred pursuant to clause (a), (b), (e),
(f) or (j) above and (l) Permitted Subsidiary Refinancing Indebtedness incurred
with respect to Indebtedness incurred pursuant to clause (a), (b), (e), (f) or
(j) above. So as to avoid duplication in determining the amount of Permitted
Indebtedness under any clause of this definition, guarantees of, or obligations
in respect of letters of credit supporting, Indebtedness otherwise included in
the determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having capital and surplus in excess of
$100 mullion; (b) commercial paper issued by any corporation, if such commercial
paper has credit ratings of at least "A-1" by S&P and at least "P-1" by Moody's;
(c) U.S. Government Obligations with a maturity of four years or less; (d)
repurchase obligations for instruments of the type described in clause (c); (e)
shares of money market mutual or similar funds having assets in excess of $100
million; (f) payroll advances in the ordinary course of business; (g) other
advances and loans to officers and employees of the Company or any Subsidiary,
so long as the aggregate principal amount of such advances and loans does not
exceed $500,000 at any one time outstanding; (h) Investments represented by that
portion of the proceeds from Asset Sales (1) that is not Cash Proceeds or (2)
that is deemed to be Cash Proceeds pursuant to the second sentence of the
definition of Cash Proceeds; (i) Investments made by the Company in its
Subsidiaries (or any Person that will be a Subsidiary as a result of such
Investment) or by a Subsidiary in the Company or in one or more Subsidiaries (or
any Person that will be a Subsidiary as a result of such Investment); and (j)
Investments in stock, obligations or securities received in settlement of debts
owing to the Company or any Subsidiary as a result of bankruptcy or insolvency
proceedings or upon the foreclosure, perfection or enforcement of any Lien in
favor of the Company or any Subsidiary, in each case as
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<PAGE>
to debt owing to the Company or any Subsidiary that arose in the ordinary course
of business of the Company or any such Subsidiary, provided that any stocks,
obligations or securities received in settlement of debts that arose in the
ordinary course of business (and received other than as a result of bankruptcy
or insolvency proceedings or upon foreclosure, perfection or enforcement of any
Lien) that are, within 30 days of receipt, converted into cash or cash
equivalents shall be treated as having been cash or cash equivalents at the time
received.
"Permitted Liens" means (a) Liens in existence on the Issue Date; (b)
Liens created for the benefit of the Notes; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation of,
such transaction), PROVIDED that such Lien relates solely to such Property and
the proceeds thereof and accessories and upgrades thereto; (d) Liens on Property
existing at the time of the acquisition thereof (and not incurred as a result
of, or in anticipation of, such transaction), PROVIDED that such Liens relate
solely to such Property and the proceeds thereof and accessories and upgrades
thereto; (e) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (f) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens and Liens for master's and crew's
wages and other similar maritime Liens, and incurred in the ordinary course of
business; (g) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of property and defects, irregularities and deficiencies
in title to real property that do not, individually or in the aggregate,
materially affect the ability of the Company and its Subsidiaries, taken as a
whole, to conduct the business presently conducted; (h) Liens for taxes or
assessments or other governmental charges or levies not yet due and payable, or
the validity of which is being contested by the Company or a Subsidiary in good
faith appropriate proceedings upon stay of execution or the enforcement thereof
and for which adequate reserves in accordance with GAAP or other appropriate
provision has been made; (i) Liens to secure Indebtedness incurred for the
purpose of financing all or a part of the purchase price or construction cost of
Property (including the cost of upgrading or refurbishing rigs or drillships)
acquired or constructed after the Issue Date, PROVIDED that (1) the principal
amount of Indebtedness secured by such Liens shall not exceed 100% of the lesser
of cost or Fair Market Value of the Property so acquired, upgraded or
constructed plus transaction costs related thereto, (2) such Liens shall not
encumber any other Property of the Company or any Subsidiary (other than the
proceeds thereof and accessions and upgrades thereto) and (3) such Liens shall
attach to such Property within 180 days of the date of the later of commencement
of commercial operations of such Property and completion of the construction,
acquisition, upgrade or improvement of such Property; (j) Liens securing Capital
Lease Obligations and other obligations, PROVIDED that such Liens secure Capital
Lease Obligations and other obligations which, when combined with (1) the
outstanding secured Indebtedness of the Company and its Subsidiaries (other than
Indebtedness secured by Liens described under clauses (b) and (i) hereof) and
(2) the aggregate amount of all other Capital Lease Obligations and other
obligations of the Company and its Subsidiaries, does not exceed 10% of the
Company's Consolidated Net Tangible Assets; (k) Liens to secure any extension,
renewal, refinancing or refunding (or successive extensions, renewals,
refinancings or refundings), in whole or in part, of any Indebtedness secured by
Liens referred to in the foregoing clauses (a), (b), (c), (d) and (i), PROVIDED
that such Liens do not extend to any other Property of the Company or any
Subsidiary (other than the proceeds thereof and accessions and upgrades thereto)
and the principal amount of the Indebtedness secured by such Liens is not
increased; (1) any charter or lease of drilling rigs in the ordinary of course
of business; (m) leases or subleases of property to other Persons in the
ordinary course of business; (n) Liens securing Non-Recourse Indebtedness; (o)
Liens securing Permitted Indebtedness described in clause (b) of the definitions
thereof; (p) judgment liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been only initiated for the
review of such judgment shall not have been finally terminated or the period
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within which such proceedings may be initiated shall not have expired; (q)
rights of setoff of banks and other Persons; (r) other deposits made in the
ordinary course of business to secure liability to insurance carriers under
insurance or self-insurance arrangements; (s) Liens securing reimbursement
obligations under letters of credit, entered into in the ordinary course of
business if in each case such Liens cover only the title documents and related
goods (and any proceeds thereof) covered by the related letter of credit; and
(t) Liens or equitable encumbrances deemed to exist by reason or fraudulent
conveyance or transfer laws or negative pledge or similar agreements to refrain
from permitting Liens.
"Permitted Non-Recourse Subsidiary Refinancing Indebtedness" means
Non-Recourse Indebtedness of any Non-Recourse Subsidiary, incurred in exchange
for, or the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Non-Recourse Indebtedness of such Subsidiary which
outstanding Non-Recourse Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of this Indenture.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the Company,
which outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of this Indenture (excluding any Permitted
Indebtedness), PROVIDED that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is PARI PASSU with or subordinated in right
of payment to the Notes, then such new Indebtedness is PARI PASSU with or
subordinated, as the case may be, in right of payment (without regard to its
being secured) to, the Notes at least to the same extent as the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, (ii) such new
Indebtedness is scheduled to mature later than the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (iii) such new Indebtedness has
an Average Life at the time such Indebtedness is incurred that is greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, and (iv) such new Indebtedness is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Subsidiary incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance, refund or repurchase outstanding Indebtedness of such
Subsidiary, which outstanding Indebtedness was incurred in accordance with, or
is otherwise permitted by, the terms of this Indenture, PROVIDED that (i) if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased is
PARI PASSU with or subordinated in right of payment to the Notes, then such new
Indebtedness is PARI PASSU with or subordinated, as the case may be, in right of
payment (without regard to its being secured) to the Notes at least to the same
extent as the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (ii) such new Indebtedness is scheduled to mature later than the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, (iii)
such new Indebtedness has an Average Life at the time such Indebtedness is
incurred that is greater than the Average Life of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, and (iv) such new
Indebtedness is in an aggregate principal amount (or, if such indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in
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excess of the amount of liability in respect thereof determined in accordance
with GAAP) plus the amount of reasonable fees, expenses and premium, if any,
incurred by the Company or such Subsidiary in connection therewith.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible.
"Qualified Equity Offering" means any public offering or private placement
of Capital Stock (other than Redeemable Stock) of the Company for cash
consummated after the Issue Date (other than an offering pursuant to a
registration statement on Form S-8 or any successor form or otherwise relating
to equity securities issuable under any employee benefit plan of the Company).
"Redeemable Stock" means, with respect to any Person, any equity security
that by its terms or otherwise is required to be redeemed, or is redeemable at
the option of the holder thereof, at any time prior to one year following the
Stated Maturity of the Notes or is exchangeable into Indebtedness of such Person
or any of its subsidiaries.
"Related Business" means any business related, ancillary or complementary
to the business of the Company and its Subsidiaries on the Issue Date.
"Replacement Asset" means a Property or asset that, as determined by the
Board of Directors of the Company as evidenced by a Board Resolution, is used or
is useful in a Related Business.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or make
any distribution in respect of, or purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company or any Affiliate of the Company, or
warrants, rights or options to acquire such Capital Stock, other than (x)
dividends payable solely in the Capital Stock (other than Redeemable Stock) of
the Company, or in warrants, rights or options to acquire such Capital Stock and
(y) dividends or distributions by a Subsidiary to the Company or to a Wholly
Owned Subsidiary; (ii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, prior to any scheduled
principal payment, scheduled sinking fund payment or other stated maturity,
Indebtedness of the Company or any Subsidiary which is subordinated in right of
payment to the Notes; or (iii) make any Restricted Investment in any Person.
"Sale and Lease-Back Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its subsidiaries.
"Senior Debt" means any Indebtedness incurred by the Company, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is subordinated in right of payment to the Notes, PROVIDED that Senior Debt will
not include (a) any liability for federal, state, local or other taxes owed or
owing by the Company, (b) any Indebtedness owing to any Subsidiaries of the
Company, (c) any obligations with respect to Capital Stock of the Company, (d)
any trade payables or (e) any Indebtedness that is incurred in violation of this
Indenture.
"Senior Notes due 2007" means the Company's 9 3/8% Senior Notes due 2007.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such Regulation is in
effect on the Issue Date.
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"Stated Maturity," when used with respect to a Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Subsidiary Guarantor that is subordinated in right of payment to the Notes or
the Subsidiary Guarantees, as the case may be, and does not mature prior to one
year following the Stated Maturity of the Notes.
The term "subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries or
such Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such Person
and (iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Subsidiary" means a subsidiary of the Company other than a Non-Recourse
Subsidiary.
"Subsidiary Guarantee" means any guarantee of the Notes by any Subsidiary
Guarantor in accordance with the provisions described under Article Fourteen
hereof.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries, if
any, executing this Indenture and (ii) any Person that becomes a successor
guarantor of the Notes in compliance with the provisions described under Article
Fourteen hereof.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) above, are not callable or redeemable at the option of the
issuer thereof; or (iii) depository receipts issued by a bank or trust company
as custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock or other interests (including partnership interests)
in such Person entitling the holders thereof (whether at all times or at the
times that such class of Capital Stock has voting power by reason of the
happening of any contingency) to vote in the election of members of the board of
directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Voting 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
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corporate citizens of such foreign jurisdiction in order for such Subsidiary to
transact business in such foreign jurisdiction, provided that the Company,
directly or indirectly, owns the remaining Capital Stock or ownership interest
in such Subsidiary and, by contract or otherwise, controls the management and
business of such Subsidiary and derives the economic benefits of ownership of
such Subsidiary to substantially the same extent as if such Subsidiary were a
wholly owned Subsidiary.
SECTION 1.2. SUPPLEMENT TO ARTICLE FOUR OF THE ORIGINAL INDENTURE. The
Original Indenture is supplemented with respect to the Notes by inserting the
following provision in Article Four:
Section 405. DISCHARGE OF SUBSIDIARY GUARANTEES. The obligations of
each Subsidiary Guarantor with respect to its Subsidiary Guarantee and
under this Indenture shall be discharged automatically to the same extent
as the obligations of the Company with respect to the Notes are discharged
pursuant to this Article Four, and such obligations of each Subsidiary
Guarantor so discharged shall be subject to reinstatement pursuant to
Section 404 in the event that such obligations of the Company shall be
reinstated.
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE. (a)
Section 501 of the Original Indenture is supplemented with respect to the Notes
by adding the following provisions (8)-(14) below:
(8) the Company fails to comply with any of its covenants or
agreements contained in Section 801 hereof or fails to make a Change of
Control Offer in accordance with Section 1017 hereof or an Asset Sale
Offer in accordance with Section 1013 hereof;
(9) default in the performance or breach of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Notes, any Subsidiary Guarantee or this Indenture (other than a covenant
or agreement a default in performance or breach of which is specifically
dealt with) and continuance of such default or breach for a period of 30
days after written notice thereof has been mailed, by registered or
certified mail, to the Company or such Subsidiary Guarantor by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the outstanding Notes;
(10) Indebtedness of the Company or any Subsidiary (other than
Non-Recourse Indebtedness or Limited Recourse Indebtedness) is not paid
when due within the applicable grace period or is accelerated by the
holders thereof and, in either case, the aggregate principal amount of
such due and unpaid or accelerated Indebtedness exceeds $10 million;
(11) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of any Subsidiary that constitutes
a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging such Subsidiary or Subsidiaries a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of such Subsidiary
or Subsidiaries under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Subsidiary or
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Subsidiaries or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 90 consecutive days; or
(12) the commencement by any Subsidiary that constitutes a
Significant Subsidiary or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case of proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of such Subsidiary or
Subsidiaries in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Subsidiary or Subsidiaries, or the filing by such
Subsidiary or Subsidiaries, of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by such Subsidiary or Subsidiaries to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Subsidiary or Subsidiaries or of any substantial part of the property of
such Subsidiary or Subsidiaries, or the making by such Subsidiary or
Subsidiaries of an assignment for the benefit of creditors, or the
admission by such Subsidiary or Subsidiaries in writing of the inability
of such Subsidiary or Subsidiaries to pay the debts of such Subsidiary or
Subsidiaries generally as they become due, or the taking of corporate
action by such Subsidiary or Subsidiaries in furtherance of any such
action; or
(13) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Company or any Subsidiary in an uninsured
or unindemnified aggregate amount in excess of $10 million which remain
undischarged or unsatisfied for a period of 30 consecutive days after the
right to appeal them has expired; or
(14) any Subsidiary Guarantee shall for any reason cease to be, or
be asserted by the Company or any Subsidiary Guarantor, as applicable, not
to be, in full force and effect (except pursuant to the release of any
such Subsidiary Guarantee in accordance with this Indenture).
(b) The second sentence of Section 502 of the Original Indenture is
superseded with respect to the Notes by the following provision:
If an Event of Default described in clause (5), (6), (11) or (12) of
Section 501 shall occur, the principal amount of the Notes IPSO FACTO
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE.
Section 801 of the Original Indenture is superseded with respect to the Notes by
the following provisions:
Section 801. The Company will not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than
a merger of a Subsidiary into the Company in which the Company is the
continuing corporation), or sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of the Property and assets
of the Company and the Subsidiaries, taken as a whole, to any Person,
unless
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(i) either (a) the Company shall be the continuing corporation
or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person
which acquires, by sale, assignment, conveyance, transfer, lease or
other disposition, all or substantially all of the Property and
assets of the Company and the Subsidiaries, taken as a whole (such
corporation or Person, the "Surviving Entity"), shall be a
corporation organized and validly existing under the laws of the
United States of America, any political subdivision thereof or any
state thereof or the District of Columbia, the Bahamas, Barbados,
Bermuda, the British Virgin Islands, the Cayman Islands, any of the
Channel Islands, France, the Netherlands or the Netherlands Antilles
and shall expressly assume, by a supplemental Indenture, the due and
punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance of the Company's
covenants and obligations under this Indenture;
(ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), no Event of Default or Default shall have occurred
and be continuing or would result therefrom;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity if the Company
is not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transactions;
(iv) immediately after giving effect to any such transaction
or series of transactions on a pro forma basis as if such
transaction or series of transactions had occurred on the first day
of the Determination Period, the Company (or the Surviving Entity if
the Company is not continuing) would be permitted to incur $1.00 of
additional Indebtedness pursuant to the tests described in the first
sentence under the caption Section 1010 hereof;
(v) in the event that the Company or the Surviving Entity is
organized in a jurisdiction other than the United States which is
different from the jurisdiction in which the obligor on the Notes
was organized immediately before giving effect to the transaction,
(a) the Company or such Surviving Entity, as applicable, delivers to
the Trustee an Opinion of Counsel stating that (1) the obligations
of the Company or the Surviving Entity, as applicable, are
enforceable under the laws of the new jurisdiction of its formation
subject to customary exceptions and (2) the holders of Notes will
not recognize any income, gain or loss for U.S. federal income tax
purposes as a result of the transaction and will be subject to U.S.
federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such transaction had
not occurred, (b) the Company or such Surviving Entity, as
applicable, agrees in writing to submit to jurisdiction and appoints
an agent for the service of process, each under terms substantially
similar to those contained in this Indenture with respect to the
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Company, (c) the Company or such Surviving Entity, as applicable,
agrees in writing to pay Additional Amounts as provided under this
Indenture with respect to the Company, except that such Additional
Amounts shall relate to any withholding tax whatsoever regardless of
any change of law subject to exceptions substantially similar to
those contained in this Indenture and (d) the board of directors (or
comparable governing body) of the Company or such Surviving Entity,
as applicable, determines in good faith that such transaction will
have no material adverse effect on any holder of Notes and a board,
or other applicable, resolution to that effect is delivered to the
Trustee; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE.
(a) Section 901 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions at the end of Section 901:
(9) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Internal Revenue
Code of 1986 (the "Code"), or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(b) of the Code); or
(10) to add or, except as provided in Article IV or Section 1404,
release any Subsidiary Guarantor pursuant to the terms of this Indenture,
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
(b) Section 902 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions:
(4) modify the obligations of the Company to make a Change of
Control Offer (including reducing the premium payable thereon) pursuant to
Section 1017 hereof or an Asset Sale Offer pursuant to Section 1013
hereof; or
(5) subordinate in right of payment, or otherwise subordinate, the
Notes or any Subsidiary Guarantee to any other Indebtedness.
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE.
(a) Article 10 of the Original Indenture is supplemented with respect to
the Notes by adding "(a)" before the first paragraph of Section 1007 and adding
the following section at the end of Section 1007:
(b) Additional Amounts will be payable in the event the Company
becomes, or a successor to the Company is, a corporation organized or
existing under the laws of any of the Countries in which the Company may
become or a successor to the Company may be
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organized which are listed in clause (i) of Section 801 hereof (each, a
"Permitted Country") and in the event the Company elects to redeem the
Notes pursuant to clause (d) of Section 1109. In such circumstances, all
payments made by the Company on the Notes will be made without deduction
or withholding, for or on account of, any and all present or future taxes,
duties, assessments, or governmental charges of whatever nature imposed,
levied, collected or assessed by or on behalf of any taxing authority in
such Permitted Country, unless the deduction or withholding of such taxes,
duties, assessments or governmental charges is then required by law. If
any deduction or withholding for or on account of any present or future
taxes, assessments or other governmental charges of such Permitted
Country, or any political subdivision or taxing authority thereof or
therein, shall at any time be required in respect of any amounts to be
paid by the Company under the Notes, the Company will pay or cause to be
paid such Additional Amounts as may be necessary in order that every new
payment of the principal of and interest on the Notes, after deduction for
withholding for or on account of any future tax, assessment or other
governmental charge will not be less than the amount provided for in the
Notes to be then due and payable; PROVIDED, HOWEVER, that the foregoing
obligation to pay Additional Amounts shall not apply in respect of:
(i) any tax, withholding, assessment or other governmental
charge which would not have been imposed but for (A) the existence
of any present or former connection between such Holder (or between
a fiduciary, settlor, beneficiary, member or shareholder of, or
possessor of a power over, such Holder, if such Holder is an estate,
trust, partnership or corporation) and a Permitted Country, or any
political subdivision or taxing authority thereof including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in trade
or business therein or having or had a permanent establishment
therein or (B) the presentation of a Note (where presentation is
required) for payment on a date more than 30 days after the date on
which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later, except
for Additional Amounts with respect to taxes that would have been
imposed had the holder presented the note for payment within such
30-day period;
(ii) any estate, inheritance, gift, sale, transfer or personal
property tax;
(iii) any tax, assessment or other governmental charge that is
withheld by reason of the failure to timely comply by the Holder or
the beneficial owner of the note with a request in writing of the
Company (which request shall be furnished to the Trustee) (A) to
provide information concerning the nationality, residence or
identity of the Holder or such beneficial owner or (B) to make any
declaration or other similar claim or satisfy any information or
reporting requirement, which, in the case of (A) or (B), is required
or imposed by a statute, treaty, regulation or administrative
practice of the taxing or domicile jurisdiction as a precondition to
exemption from or reduction of all or part of such tax, assessment
or other governmental charge; PROVIDED, HOWEVER, that this clause
(iii) shall not apply to limit the Company's obligation to pay
Additional Amounts if the completing and filing of the information
described in subclause (A) or the declaration or other claim
described in subclause (B) would be materially more onerous in form,
in procedure or in substance of information disclosed, in comparison
to the information reporting requirements imposed under U.S. tax law
with respect to Forms 1001, W-8 and W-9;
(iv) any tax which is payable otherwise than by withholding by
the Company or its paying agent; or
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(v) any combination of items (i), (ii), (iii) and (iv) above;
nor shall Additional Amounts be paid with respect to any payment of
the principal of, or any interest on, any Note to any Holder who is
not the sole beneficial owner of such Note or is a fiduciary or
partnership, but only to the extent that a beneficial owner, a
beneficiary or a settlor with respect to a fiduciary or a member of
the partnership would not have been entitled to the payment of the
Additional Amount had the beneficial owner, beneficiary, settlor or
member of such partnership received directly its beneficial or
distributive share of the payment.
The Company will also (i) make (or cause to be made) such
withholding or deduction and (ii) remit (or cause to remitted) the full
amount deducted or withheld to the relevant authority in accordance with
applicable law. The Company will make reasonable efforts to obtain
certified copies of tax receipts evidencing the payment of any taxes so
deducted or withheld from each taxing authority imposing such taxes. The
Company will furnish to the Trustee as promptly as practicable after the
payment of any taxes so deducted or withheld is due pursuant to applicable
law, either certified copies of tax receipts evidencing such payment or,
if the receipts are not obtainable, other evidence of such payments by the
Company.
(b) Article 10 of the Original Indenture is supplemented with respect to
the Notes by inserting the following sections at the end thereof:
Section 1008. TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any Subsidiary to, directly or indirectly, conduct any
business, enter into or permit to exist any transaction or series of
related transactions, including, but not limited to, the purchase, sale or
exchange of Property, the making of any Investment, the giving of any
guarantee or the rendering of any service with any Affiliate of the
Company (other than transactions among the Company and any Wholly Owned
Subsidiaries) unless (i) such transaction or series of related
transactions is on terms set forth in writing which are no less favorable
to the Company or such Subsidiary than those that could be obtained in a
comparable arm's length transaction with a Person that is not such an
Affiliate and (ii) (a) with respect to a transaction or series of related
transactions that has a Fair Market Value in excess of $2 million but less
than $5 million, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with clause (i) above and (b) with respect to a transaction or
series of related transactions that has a Fair Market Value equal to or in
excess of $5 million, the transaction or series of related transactions is
approved by a majority of the Board of Directors of the Company (including
a majority of the disinterested directors), which approval is set forth in
a Board Resolution certifying that such transaction or series of
transactions complies with clause (i) above. The foregoing provisions
shall not be applicable to (i) reasonable compensation (including amounts
paid pursuant to employee benefit plans), indemnification paid or made
available to an officer, director or employee of the Company or a
Subsidiary for services rendered in such person's capacity as an officer,
director or employee or (ii) the making of any Restricted Payment
otherwise permitted by this Indenture.
Section 1009. LIMITATION ON RESTRICTED PAYMENTS. The Company will
not, and will not permit any Subsidiary to, make any Restricted Payment,
unless at the time of and after giving effect to the proposed Restricted
Payment (a) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom), (b) the Company could incur at
least $1.00 of additional Indebtedness under the tests described in the
first sentence under Section 1010 hereof and (c) the aggregate
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amount of such Restricted Payment and all Restricted Payments (the amount
of any Restricted Payment not made in cash will be based on Fair Market
Value) declared or made on or after the Issue Date by the Company or any
Subsidiary shall not exceed the sum of (i) 50% (or if such Consolidated
Net Income shall be a deficit, minus 100% of such deficit) of the
aggregate Consolidated Net Income accrued during the period beginning on
the first day of the fiscal quarter in which the Issue Date falls and
ending on the last day of the fiscal quarter ending immediately prior to
the date of such proposed Restricted Payment, plus (ii) an amount equal to
the aggregate net cash proceeds received by the Company, subsequent to the
Issue Date, from the issuance or sale (other than to a Subsidiary or an
employee stock ownership plan or trust established by the Company for the
benefit of its employees) of shares of its Capital Stock, excluding
Redeemable Stock, but including Capital Stock issued upon the exercise of
options, warrants or rights to purchase Capital Stock (other than
Redeemable Stock) of the Company, and the liability (expressed as a
positive number) in accordance with GAAP in respect of any Indebtedness of
the Company or carrying value of Redeemable Stock, which has been
converted into, exchanged for or satisfied by the issuance of shares of
Capital Stock (other than Redeemable Stock) of the Company, subsequent to
the Issue Date plus (iii) to the extent not otherwise included in
Consolidated Net Income, the net reduction in Investments in Non-Recourse
Subsidiaries or joint ventures resulting from dividends, repayments of
loans or advances, releases or discharges of guarantees or other
obligations, or other transfers of assets, in each case to the Company or
a Subsidiary after the Issue Date from any Non-Recourse Subsidiary or
joint venture or from the redesignation of a Non-Recourse Subsidiary as a
Subsidiary (valued in each case as provided in the definition of
Investment), not to exceed in the case of any Non-Recourse Subsidiary or
joint venture the total amount of Investments (other than Permitted
Investments) in such Non-Recourse Subsidiary or joint venture made by the
Company and its Subsidiaries in such Non-Recourse Subsidiary or joint
venture existing on or made after the Issue Date, plus (iv) to the extent
not otherwise included in Consolidated Net Income or in clause (iii)
above, the total amount of Investments in joint ventures (calculated as of
the Issue Date) which have become Wholly Owned Subsidiaries of the Company
subsequent to the Issue Date, plus (v) $25 million.
The foregoing provisions will not prevent (A) the payment of any
dividend on Capital Stock of any class within 60 days after the date of
its declaration if at the date of declaration such payment would be
permitted by this Indenture PROVIDED that at the time of the declaration
of such dividend, no Default or Event of Default shall have occurred and
be continuing; (B) any repurchase or redemption of the Capital Stock or
Subordinated Indebtedness of the Company made by exchange for Capital
Stock of the Company (other than Redeemable Stock), or out of the net cash
proceeds from the substantially concurrent issuance or sale (other than to
a Subsidiary) of Capital Stock of the Company (other than Redeemable
Stock), PROVIDED that the net cash proceeds from such sale are excluded
from computations under clause (c)(ii) above to the extent such proceeds
are applied to purchase or redeem such Capital Stock or Subordinated
Indebtedness; and (C) any repurchase or redemption of Subordinated
Indebtedness of the Company solely in exchange for, or out of the net cash
proceeds from the substantially concurrent sale of, new Subordinated
Indebtedness of the Company, so long as such Subordinated Indebtedness (x)
is subordinated to the Notes at least to the same extent as the
Subordinated Indebtedness so exchanged, purchased or redeemed, (y) has a
stated maturity later than the stated maturity of the Subordinated
Indebtedness so exchanged, purchased or redeemed and (z) has an Average
Life at the time incurred that is greater than the remaining Average Life
of the Subordinated Indebtedness
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so exchanged, purchased or redeemed. Restricted Payments permitted to be
made as described in the preceding sentence will be excluded in
calculating the amount of Restricted Payments thereafter, except such
Restricted Payments made as described in clause (A), which will be
included in calculating the amount of Restricted Payments thereafter.
Section 1010. LIMITATION ON INDEBTEDNESS. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, create, incur,
assume, suffer to exist, guarantee or otherwise become liable, with
respect to the payment of (collectively, "incur"), any Indebtedness (other
than Non-Recourse Indebtedness), unless after giving pro forma effect to
the incurrence of such Indebtedness, no Default or Event of Default would
occur, and the Consolidated Interest Coverage Ratio for the Determination
Period preceding the Transaction Date is at least 2.5 to 1.0.
Notwithstanding the foregoing, the Company or any Subsidiary may incur
Permitted Indebtedness. Any Indebtedness of a Person existing at the time
such Person became a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary.
Section 1011. LIMITATION ON SUBSIDIARY INDEBTEDNESS AND PREFERRED
STOCK. The Company will not permit any Subsidiary to incur, directly or
indirectly, any Indebtedness (other than Indebtedness of Non-Recourse
Subsidiaries) or issue any preferred stock except:
(a) Indebtedness or preferred stock issued to and held by the
Company or a Wholly Owned Subsidiary, so long as any transfer of
such Indebtedness or preferred stock to a Person other than the
Company or a Wholly Owned Subsidiary will be deemed to constitute
the issuance of such Indebtedness or preferred stock by the issuer
thereof;
(b) Indebtedness or preferred stock of a Subsidiary issued and
outstanding prior to the date on which such Subsidiary was acquired
by the Company (other than Indebtedness or preferred stock issued in
connection with or in anticipation of such acquisition);
(c) Indebtedness or preferred stock outstanding on the Issue
Date;
(d) Indebtedness described in clauses (b), (c), (d), (f) and
(g) under the definition of "Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of such
Subsidiary;
(f) Preferred stock issued in exchange for, or the proceeds of
which are used to refinance, repurchase or redeem, Indebtedness or
preferred stock described in clauses (b) and (c) of this paragraph
(the "Retired Indebtedness or Stock"), PROVIDED that the preferred
stock so issued has (i) a liquidation value not in excess of the
principal amount or liquidation value of the Retired Indebtedness or
Stock plus related expenses for redemption and issuance and (ii) a
redemption date later than the stated maturity or redemption date
(if any) of the Retired Indebtedness or Stock;
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(g) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another Subsidiary
(other than Non-Recourse Indebtedness) in connection with a merger
of such Subsidiaries, PROVIDED that no Subsidiary or any successor
(by way of merger) thereto existing on the Issue Date shall assume
or otherwise become responsible for any Indebtedness of an entity
which is not a Subsidiary on the Issue Date, except to the extent
that a Subsidiary would be permitted to incur such Indebtedness
under this paragraph;
(h) Indebtedness to finance the construction and operation of
the drillships Pride Africa and Pride Angola pursuant to the
Drillship Credit Facilities, as in effect on the Issue Date, and any
refinancings or replacements thereof, and
(i) Indebtedness or preferred stock of any Subsidiary, which
when taken together with all other Indebtedness and preferred stock
of the Subsidiaries (except Indebtedness or preferred stock incurred
pursuant to clauses (a), (b), (d) and (h) of this Section and
clauses (e) and (f) of this covenant to the extent relating to
Indebtedness incurred pursuant to clauses (a), (b) and (d) of this
section), does not exceed at any one time outstanding the greater of
(i) $100 million and (ii) 15% of Consolidated Net Tangible Assets
determined as of the date of incurrence of such Indebtedness.
Section 1012. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, create, enter into any
agreement with any Person or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind which by
its terms restricts the ability of any Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on its Capital Stock to
the Company or any Subsidiary, (b) pay any Indebtedness owed to the
Company or any Subsidiary, (c) make loans or advances to the Company or
any Subsidiary or (d) transfer any of its Property or assets to the
Company or any Subsidiary except any encumbrance or restriction contained
in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or asset acquired after the
Issue Date, so long as such encumbrance or restriction relates only
to the Property or asset so acquired;
(iii) relating to any Indebtedness of any Subsidiary at the
date on which such Subsidiary was acquired by the Company or any
Subsidiary (other than Indebtedness incurred in anticipation of such
acquisition);
(iv) effecting a refinancing of Indebtedness issued pursuant
to an agreement referred to in the foregoing clauses (i) through
(iii), so long as the encumbrances and restrictions contained in any
such refinancing agreement, taken as whole, are no more restrictive
than the encumbrances and restrictions contained in such agreements;
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(v) which constitute customary provisions restricting
subletting or assignment of any lease of the Company or any
Subsidiary or provisions in agreements that restrict the assignment
of such agreement or any rights thereunder;
(vi) which constitute restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property;
(vii) which constitute any temporary encumbrances or
restrictions with respect to a Subsidiary under an agreement that
has been entered into for the sale or disposition of all or
substantially all of the outstanding Capital Stock of or Property
and assets of each Subsidiary provided that such sale or disposition
is otherwise permitted under this Indenture;
(viii) which constitute customary restrictions on cash, other
deposits or assets imposed by customers and other persons under
contracts entered into in the ordinary course of business; or
(ix) which constitute provisions contained in agreements or
instruments relating to Indebtedness that prohibit the transfer of
all or substantially all of the assets of the obligor under that
agreement or instrument unless the transferee assumes the
obligations of the obligor under such agreement or instrument or
such assets may be transferred subject to such prohibition.
Section 1013. LIMITATION ON ASSET SALES. The Company will not engage
in, and will not permit any Subsidiary to engage in, any Asset Sale unless
(a) except in the case of (i) an Asset Sale resulting from the requisition
of title to, seizure or forfeiture of any Property or assets or any actual
or constructive total loss or an agreed or compromised total loss or (ii)
a Bargain Purchase Contract, the Company or such Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the Property subject to such Asset Sale;
(b) except in the case of an Asset Sale described in subclauses (i) or
(ii) of clause (a), at least 75% of such consideration consists of Cash
Proceeds or the assumption of Indebtedness (other than Subordinated
Indebtedness) of the Company or such Subsidiary relating to the Property
that was the subject of such Asset Sale and the release of the Company or
such Subsidiary from Indebtedness); (c) after giving effect to such Asset
Sale, the total non-cash consideration held by the Company from all such
Asset Sales does not exceed $10 million, and (d) the Company delivers to
the Trustee an Officers' Certificate, which Officers' Certificate shall be
conclusive, certifying that such Asset Sale complies with clauses (a), (b)
and (c); PROVIDED, HOWEVER, that the requirements set forth in clause (b)
and (c) shall not apply to an Asset Sale in which the Company exchanges
assets for assets that constitute Replacement Assets. The Company or such
Subsidiary, as the case may be, may apply the Net Available Proceeds from
each Asset Sale (x) to the acquisition of one or more Replacement Assets,
or (y) to repurchase or repay Senior Debt (other than Indebtedness owed to
the Company or an affiliate of the Company) (with a permanent reduction of
availability in the case of revolving credit borrowings); PROVIDED,
HOWEVER, that such acquisition or such repurchase or repayment shall be
made within 365 days after the consummation of the relevant Asset Sale.
The following amounts will be deemed to be cash for purposes of this
provision: (i) any liabilities of the Company or any Subsidiary (as
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shown on the Company's or such Subsidiary's most recent balance sheet or
in the notes thereto), other than liabilities that by their terms are
subordinated to the Notes or the applicable Subsidiary Guarantee that are
assumed by the transferee of any such assets as a result of which the
Company and its subsidiaries are no longer obligated with respect to such
liabilities and (ii) any Indebtedness or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by
the Company or such Subsidiary into cash (to the extent of the cash
received) within 120 days of such Asset Sale.
Any Net Available Proceeds from any Asset Sale that are not used to
acquire Replacement Assets or to repurchase or repay Senior Debt within
365 days after consummation of the relevant Asset Sale constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall, or at any time after receipt of Excess
Proceeds, the Company may, at its option, make a pro rata offer to all
holders of Notes and other Indebtedness (excluding the Senior Notes due
2007; PROVIDED that the Company may make an offer to purchase such notes
in accordance with their terms) that ranks by its terms equally in right
of payment with the Notes and the terms of which contain substantially
similar requirements with respect to the application of net proceeds from
asset sales as are contained in the Indenture (an "Asset Sale Offer") to
purchase on a pro rata basis the maximum principal amount of the Notes and
other such Indebtedness in integral multiples of $1,000 that may be
purchased out of the Excess Proceeds, at a price in cash equal to 100% of
the outstanding principal amount thereof plus accrued interest, if any, to
the purchase date, in accordance with the procedures set forth in this
Indenture. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero and the Company may use any remaining
amount for general corporate purposes.
Within five business days after the Company is obligated to make an
Asset Sale Offer, the Company will send a written notice to holders of
Notes, accompanied by such information as the Company in good faith
believes will enable holders to make an informed decision with respect to
the Asset Sale Offer.
The Company will comply with any applicable tender offer rules
(including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required
under the circumstances described herein.
Section 1014. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The
Company will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Lease-Back Transaction unless (i) the proceeds
from such Sale and Lease-Back Transaction are at least equal to the Fair
Market Value of such Property being transferred and (ii) the Company or
such Subsidiary would have been permitted to enter into such transaction
under the tests described under Sections 1010, 1011 and 1015 hereof.
Section 1015. LIMITATION ON LIENS. The Company will not, and will
not permit any Subsidiary to, directly or indirectly, create, affirm,
incur, assume or suffer to exist any Liens on or with respect to any
Property of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that
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the Notes shall be secured equally and ratably with (or prior to) the
Indebtedness so secured, other than Permitted Liens.
Section 1016. LIMITATION ON NON-GUARANTOR SUBSIDIARIES. The Company
will not permit any Subsidiary that is not a Subsidiary Guarantor to
guarantee the payment of any Indebtedness of the Company unless: (i)(A)
such Subsidiary simultaneously executes and delivers a supplemental
Indenture to this Indenture providing for a Subsidiary Guarantee of the
Notes by such Subsidiary and (B), with respect to any guarantee of
Subordinated Indebtedness by a Subsidiary, any such guarantee shall be
subordinated to such Subsidiary's Subsidiary Guarantee at least to the
same extent as such Subordinated Indebtedness is subordinated to the
Notes; (ii) such Subsidiary waives, and agrees not in any manner
whatsoever to exercise any right or claim or take the benefit or advantage
of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Subsidiary as a result of any
payment by such Subsidiary under its Subsidiary Guarantee until such time
as the obligations guaranteed thereby are paid in full; and (iii) such
Subsidiary shall deliver to the Trustee an opinion of independent legal
counsel to the effect that such Subsidiary Guarantee has been duly
executed and authorized and constitutes a valid, binding and enforceable
obligation of such Subsidiary, except insofar as enforcement thereof may
be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar
as enforcement thereof is subject to general principles of equity;
PROVIDED that this covenant shall not be applicable to any guarantee of
any Subsidiary that (x) existed at the time such Person became a
Subsidiary of the Company and (y) was not incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary of the Company.
Further, a pledge of assets to secure any Indebtedness for which the
pledgor is not otherwise liable shall not be considered a guarantee.
Section 1017. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) Upon
the occurrence of a Change of Control, each Holder of Notes shall have the
right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall announce the Change of Control Offer via Dow
Jones News Service and mail a notice to the Trustee and each Holder
stating: (1) that a Change of Control has occurred and that the Change of
Control Offer is being made pursuant to this Section 1017 and that all
Notes timely tendered shall be accepted for payment; (2) the purchase
price and the purchase date described below (the "Change of Control
Payment Date"); (3) the circumstances and relevant facts regarding the
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization); (4) that any Note not
tendered shall continue to accrue interest; (5) that, unless the Company
defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest, if any, after the Change of Control Payment Date; (6)
that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the fifth Business Day preceding the
Change of Control Payment Date; (7) that Holders shall be entitled to
withdraw their election if the Paying Agent
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receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder
is withdrawing his election to have the Notes purchased; and (8) that
Holders whose Notes are being purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. If any of the Notes
subject to a Change of Control Offer is in the form of a Global
Certificate, then such notice shall be modified in form but not substance
to the extent appropriate to accord with the procedures of the Depository
applicable to repurchases. The Change of Control Offer shall remain open
for at least 20 Business Days and until the close of business on the fifth
Business Day prior to the Change of Control Payment Date. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent
such laws and regulations are applicable in connection with the repurchase
of the Notes as a result of a Change of Control.
(b) On a date that is no earlier than 30 days nor later than 60 days
from the date that the Company mails or causes to be mailed notice of the
Change of Control to the Holders (the "Change of Control Payment Date"),
the Company shall, to the extent lawful, (i) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered
and (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail or deliver to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each
such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above shall be applicable
whether or not any other provisions of this Indenture are applicable.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 1017 and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
Section 1018. REPORTS. The Company and any Subsidiary Guarantors
shall file with the Commission, to the extent such filings are accepted by
the Commission and whether or not the Company has a class of securities
registered under the Exchange Act, the annual reports, quarterly reports
and other documents that the Company and the Subsidiary Guarantors would
be required to file if the Company were subject to Section 13 or 15 of the
Exchange Act, in each case on or before the dates on which such reports
and other documents would have been required to have been filed with the
Commission if the Company had been subject to Section 13 or 15
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of the Exchange Act, beginning with the Company's fiscal year ended
December 31, 1999. The Company shall also (i) file with the Trustee (with
exhibits), and provide to each Holder of Notes (without exhibits), without
cost to such Holder, copies of such reports and documents within 15 days
after the date on which the Company files such reports and documents with
the Commission or the date on which the Company would be required to file
such reports and documents if the Company were so required and (ii) if
filing such reports and documents with the Commission is not accepted by
the Commission or is prohibited under the Exchange Act, supply at the
Company's cost copies of such reports and documents (including any
exhibits thereto) to any Holder of Notes promptly upon written request.
The Company shall at all times comply with Trust Indenture Act ss. 314(a).
Section 1019. TAXES. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good
faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the
Notes.
Section 1020. STAY, EXTENSION AND USURY LAWS. Each of the Company
and the Subsidiary Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture;
and each of the Company and the Subsidiary Guarantors (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE.
Article Eleven of the Original Indenture is supplemented with respect to the
Notes by inserting the following section at the end thereof:
Section 1109. OPTIONAL REDEMPTION. (a) The Notes will not be
redeemable at the option of the Company prior to June 1, 2004. On or after
such date, the Notes will be redeemable at the option of the Company, in
whole at any time or in part from time to time, at the following prices
(expressed in percentages of the principal amount), if redeemed during the
12 months beginning June 1 of the years indicated below, in each case
together with interest accrued to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date):
YEAR PERCENTAGE
---- ----------
2004................................ 105.000%
2005................................ 103.333%
2006................................ 101.667%
2007 and thereafter................. 100.000%
(b) If fewer than all the Notes are redeemed, selection for
redemption will be made by the Trustee, by lot or by any other means the
Trustee determines to be fair and appropriate.
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(c) Notwithstanding the foregoing, at any time on or prior to June
1, 2002, the Company may redeem up to an aggregate of 33% of the principal
amount of Notes at a redemption price of 110% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date,
with the net proceeds from a Qualified Equity Offering, PROVIDED that at
least 67% of the aggregate principal amount of Notes remain outstanding
immediately after the occurrence of such redemption and PROVIDED, FURTHER,
that such redemption occurs within 60 days of the date of the closing of
such Qualified Equity Offering.
(d) The Notes may be redeemed at the option of the Company in whole
or in part, upon not less than 30 nor more than 60 days' notice, at any
time at 100% of the principal amount thereof, plus accrued and unpaid
interest to the date fixed for such payment if, as a result of any change
in or amendment to the laws, regulations or governmental policy having the
force of law of any Permitted Country (or of any political subdivision or
taxing authority thereof or therein) or any execution of or amendment to,
any treaty or treaties affecting taxation of which the Permitted Country
(or such political subdivision or taxing authority) is a party, which
becomes effective on or after the date of the Company's change in
organizational jurisdiction (i) the Company is required, or would be
required on the next succeeding interest payment date, to pay Additional
Amounts in respect of payments on the Notes as a result of the imposition
of Taxes imposed by a Permitted Country (or any political subdivision or
taxing authority thereof) and (ii) the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the
Company that do not require undue effort or costs. In addition, the
Company will also pay to holders on the redemption date any Additional
Amounts which would otherwise be payable; PROVIDED, HOWEVER, that no such
notice of redemption shall be given earlier than 180 days prior to the
earliest date on which the Company could be obligated to pay such
Additional Amounts if a payment in respect of the Notes were then due.
Prior to the publication of the notice of redemption in accordance
with the foregoing, the Company shall deliver to the Trustee an officer's
certificate stating that (x) the Company is entitled to effect such
redemption based on an Opinion of Counsel or written advice of an
independent tax counsel or accounting firm, such opinion or advice being
reasonably acceptable to the Trustee, that the condition referred to in
clause (i) of the immediately preceding paragraph is satisfied as a result
of such change, amendment or executed or amended treaty and (y) the
condition described in (ii) of the immediately preceding paragraph is
satisfied. Such notice, once delivered by the Company to the Trustee, will
be irrevocable.
SECTION 1.8. NEW ARTICLE FOURTEEN. The Original Indenture is supplemented
with respect to the Notes by inserting the following Article Fourteen:
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
Section 1401. SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor,
jointly and severally, shall unconditionally guarantee to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and
their respective successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
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overdue principal of and interest on premium and interest on the Notes, if
any, if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment
when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately. The Subsidiary Guarantors hereby
agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and covenants that
this Subsidiary Guarantee shall not be discharged (other than in
accordance with Article Four or Section 1404 of the Indenture) except by
complete performance of the obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or Subsidiary Guarantors, or any
custodian, trustee, liquidator or other similar official acting in
relation to either the Company or Subsidiary Guarantors, any amount paid
by either to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee,
on the other hand, (x) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Five for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (y) in the event of any declaration of acceleration
of such obligations as provided in Article Five, such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantors for the purpose of this Subsidiary Guarantee. In
order to provide for just and equitable contribution among the Subsidiary
Guarantors, in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under its
Subsidiary Guarantee, such Funding Subsidiary Guarantor shall be entitled
to a contribution from each other Subsidiary Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor
(including the Funding Subsidiary Guarantor) for all payments, damages and
expenses incurred by the Funding Subsidiary Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to any Subsidiary Guarantee. Each
Subsidiary Guarantor agrees that it will not be entitled to exercise any
right of subrogation or contribution in relation to the Holders of Notes
in respect of any obligations guaranteed hereby until payment in full of
all amounts guaranteed under this Section 1401.
Section 1402. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES. To
evidence its Subsidiary Guarantee set forth in Section 1401, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit B to the Second
Supplemental Indenture shall be endorsed by
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an Officer of such Subsidiary Guarantor on each Note thereafter
authenticated and delivered by the Trustee, that a supplement to this
Indenture shall be executed on behalf of such Subsidiary Guarantor by its
duly authorized officer in accordance with Section 1016 hereof and that
such Subsidiary Guarantor shall deliver to the Trustee an Opinion of
Counsel that the foregoing have been duly authorized, executed and
delivered by such Subsidiary Guarantor and that such Subsidiary
Guarantor's Subsidiary Guarantee is a valid and legally binding obligation
of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, fraudulent conveyance and other law affecting the rights of
creditors generally.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 1401 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on a supplement to this Indenture
or on the notation of Subsidiary Guarantee no longer holds that office at
the time the Trustee authenticates the Note on which a notation of
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder and whether upon original issue, registration of
transfer, exchange or otherwise, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Person
that is then a Subsidiary Guarantor.
Section 1403. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS. No Subsidiary Guarantor may consolidate with or merge with
or into (whether or not such Subsidiary Guarantor is the surviving
Person), another Person whether or not affiliated with such Subsidiary
Guarantor unless:
(a) subject to the provisions of Section 1404 hereof, the
Person formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee in respect
of the Notes, this Indenture and such Subsidiary Guarantor's
Subsidiary Guarantee;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(c) such transaction does not violate any of Sections 1008,
1009, 1010, 1011, 1012, 1014, 1015, 1016, 1017, 1018, 1019 and 1020.
Notwithstanding the foregoing, no Subsidiary Guarantor shall be
permitted to consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another Person pursuant to
the preceding sentence if such consolidation or merger would not be
permitted by Article Eight hereof.
In case of any such consolidation or merger and upon the assumption
by the successor Person, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations
of the Subsidiary Guarantor in respect of the Notes, this Indenture and
such Subsidiary Guarantor's Subsidiary Guarantee, such successor
corporation shall succeed to and be substituted for the
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<PAGE>
Subsidiary Guarantor with the same effect as if it had been named herein
as a Subsidiary Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of
the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All the Subsidiary Guarantees
so issued shall in all respects have the same legal rank and benefit under
this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles Eight and Ten hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the
Company, or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company.
Section 1404. RELEASES OF SUBSIDIARY GUARANTEES. In the event of a
sale or other disposition of all or substantially all of the assets of any
Subsidiary Guarantor to a Person that is not a Subsidiary or to a
Non-Recourse Subsidiary in a transaction that does not violate any
provisions of this Indenture, by way of merger, consolidation or
otherwise, or a sale or other disposition (including, without limitation,
by foreclosure) of all of the capital stock of any Subsidiary Guarantor,
then such Subsidiary Guarantor (in the event of a sale or other
disposition (including, without limitation, by foreclosure), by way of
such a merger, consolidation or otherwise, of all of the capital stock of
such Subsidiary Guarantor) or the Person acquiring the property (in the
event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor) shall be released and relieved of any
obligations under this Indenture and its Subsidiary Guarantee; PROVIDED
that the Net Available Proceeds of such sale or other disposition are
applied in accordance with Section 1013 hereof. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by the
Company in accordance with the provisions of this Indenture, including
without limitation Section 1013, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Subsidiary
Guarantor from its obligations under this Indenture and its Subsidiary
Guarantee. In the event of a release or discharge in full of all
obligations of any Subsidiary Guarantor in respect of all of its
guarantees of Indebtedness of the Company (other than the Notes), such
Subsidiary Guarantor shall, upon the written request of the Company, be
released and relieved of any obligation under this Indenture and its
Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect that such Subsidiary Guarantor has
been released or discharged in full from all of its obligations under all
of its guarantees of Indebtedness of the Company, the Trustee shall
execute any documents reasonably required in order to evidence the release
of such Subsidiary Guarantor from its obligations under this Indenture and
its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal
of and premium and interest on the Notes and for the other obligations of
any Subsidiary Guarantor under this Indenture.
Any Subsidiary Guarantor that is designated a Non-Recourse
Subsidiary in accordance with the terms of this Indenture shall be
released from and relieved of its
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<PAGE>
obligations under this Indenture and its Subsidiary Guarantee. Any
Non-Recourse Subsidiary that ceases to be a Non-Recourse Subsidiary shall
thereupon execute a supplement to this Indenture in accordance with the
terms of this Indenture.
Section 1405. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY. For
purposes hereof, each Subsidiary Guarantor's liability shall be that
amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be limited to the lesser of (i)
the aggregate amount of the obligations of the Company under the Notes and
this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Subsidiary Guarantor "insolvent" (as such term is defined in
the federal Bankruptcy Law and in the Debtor and Creditor Law of the State
of New York) or (B) left it with unreasonably small capital at the time
its Subsidiary Guarantee of the Notes was entered into, after giving
effect to the incurrence of existing Indebtedness immediately prior to
such time; provided that, it shall be a presumption in any lawsuit or
other proceeding in which such Subsidiary Guarantor is a party that the
amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of
creditors of such Subsidiary Guarantor, or debtor in possession or trustee
in bankruptcy of such Subsidiary Guarantor, otherwise proves in such a
lawsuit that the aggregate liability of such Subsidiary Guarantor is
limited to the amount set forth in clause (ii). In making any
determination as to the solvency or sufficiency of capital of a Subsidiary
Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and
any other rights such Subsidiary Guarantor may have, contractual or
otherwise, shall be taken into account.
Section 1406. "TRUSTEE" TO INCLUDE PAYING AGENT. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this
Article Fourteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article Fourteen in place of the Trustee.
SECTION 1.9. EFFECT OF ARTICLE ONE. The supplements to the Original
Indenture set forth in Article One of this Second Supplemental Indenture affect
only the provisions of the Original Indenture as such provisions relate to the
Notes, the series of Securities comprised of the Notes and the rights, remedies
and obligations of the Company, the Subsidiary Guarantors, the Holders of Notes,
the Trustee and other Persons set forth in the Original Indenture as such
rights, remedies and obligations relate to the Notes. Unless otherwise expressly
set forth in a subsequent supplement to the Original Indenture, as supplemented
hereby, the supplements to the Original Indenture contained in Article One of
this Second Supplemental Indenture relate only to the series of Securities
comprised of the Notes.
ARTICLE TWO
THE NOTES
The Notes shall be issued in the form of one or more permanent global
Notes substantially in the form set forth on Exhibit A hereof, duly executed by
the Company and authenticated by the Trustee as provided in the Indenture. The
terms of the Notes set forth on Exhibit A hereto are incorporated by reference
herein as if set forth herein in their entirety.
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ARTICLE THREE
REPRESENTATIONS OF THE COMPANY
SECTION 3.1. AUTHORITY OF THE COMPANY. The Company is duly authorized to
execute and deliver this Second Supplemental Indenture, and all corporate action
on its part required for the execution and delivery of this Second Supplemental
Indenture has been duly and effectively taken.
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS. The Company warrants that
the recitals of fact and statements contained in this Second Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE FOUR
CONCERNING THE TRUSTEE
SECTION 4.1. ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and conditions
set forth in the Original Indenture and in this Second Supplemental Indenture,
to all of which the Company and the respective Holders of the Notes at any time
hereafter outstanding agree by their acceptance thereof.
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The recitals
and statements contained in this Second Supplemental Indenture shall be taken as
the recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this Second Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.1. RELATION TO THIS INDENTURE. The provisions of this Second
Supplemental Indenture shall become effective immediately upon the execution and
delivery hereof. This Second Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Original Indenture as fully
and with the same effect as if all such terms and provisions had been set forth
in the Original Indenture; PROVIDED, HOWEVER, such terms and provisions shall be
so included in this Second Supplemental Indenture solely for the benefit of the
Company, the Subsidiary Guarantors, the Trustee and the Holders of the Notes.
The Original Indenture is hereby ratified and confirmed and shall remain and
continue in full force and effect in accordance with the terms and provisions
thereof, as supplemented by this Second Supplemental Indenture, and the Original
Indenture and this Second Supplemental Indenture shall be read, taken and
construed together as one instrument.
SECTION 5.2. MEANING OF TERMS. Any term used in this Second Supplemental
Indenture which is defined in the Original Indenture shall have the meaning
specified in the Original Indenture, unless the context shall otherwise require.
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
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<PAGE>
SECTION 5.4. GOVERNING LAW. This Second Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, Pride International, Inc. has caused this Second
Supplemental Indenture to be executed in its corporate name by a duly authorized
officer and The Chase Manhattan Bank has caused this Second Supplemental
Indenture to be executed in its corporate name by a duly authorized officer, all
as of the date first above written.
PRIDE INTERNATIONAL, INC.
By: __________________________
Name: ________________________
Title: _______________________
THE CHASE MANHATTAN BANK
By: __________________________
Name: ________________________
Title: _______________________
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<PAGE>
EXHIBIT A
(FACE OF NOTE)
10% Senior Notes due 2009
CUSIP Number 741932AC1
No. $200,000,000
PRIDE INTERNATIONAL, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on June 1, 2009.
Interest Payment Dates: June 1 and December 1, beginning December 1, 1999
Record Dates: May 15 and November 15
[SEAL]
ATTEST: PRIDE INTERNATIONAL, INC.
By: ___________________________ By: ___________________________
Name: _________________________ Name: _________________________
Title: ________________________ Title: ________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
The Chase Manhattan Bank,
as Trustee
By: _____________________________
Authorized Officer
Dated:
A-1
<PAGE>
(BACK OF NOTE)
10% Senior Note due 2009
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. (a) Pride International, Inc., a Louisiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate of 10% per annum, which interest shall be payable in cash semi-annually in
arrears on June 1 and December 1, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"); PROVIDED
that the first Interest Payment Date shall be December 1, 1999. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of original issuance. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company will pay
interest to the Person who is the Holder of record of this Note as of the close
of business on the May 15 or November 15 immediately preceding such Interest
Payment Date, even if this Note is canceled after such record date and on or
before such Interest Payment Date. Principal, premium, if any, and interest, if
any, on this Note will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Chase Manhattan Bank, the
Trustee under the Indenture, will act as Registrar and Paying Agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company, any Subsidiary Guarantor or any other of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
May 1, 1997, as supplemented by a Second Supplemental Indenture dated as of May
[26], 1999 (collectively, the "Indenture") between the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are general unsecured obligations of the Company limited in an
aggregate principal amount to $300,000,000 and will mature on June 1, 2009.
A-2
<PAGE>
5. OPTIONAL REDEMPTION. (a) The Notes are not redeemable at the Company's
option prior to June 1, 2004. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month period
beginning on June 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2004.................................................... 105.000%
2005.................................................... 103.333%
2006.................................................... 101.667%
2007 and thereafter..................................... 100.000%
(b) Notwithstanding clause (a) of this Paragraph 5, prior to June 1, 2002,
the Company may, at its option, on any one or more occasions, redeem up to 33%
of the aggregate principal amount of Notes at a redemption price equal to 110%
of the principal amount thereof, plus accrued and unpaid interest thereon to the
redemption date, with the net proceeds of a Qualified Equity Offering; PROVIDED
that at least 67% of the aggregate principal amount of Notes must remain
outstanding immediately after the occurrence of such redemption; and provided,
further, that any such redemption shall occur within 60 days of the date of the
closing of such Qualified Equity Offering.
(c) The Notes may be redeemed at the option of the Company in whole or in
part, upon not less than 30 nor more than 60 days' notice, at any time at 100%
of the principal amount thereof, plus accrued and unpaid interest to the date
fixed for such payment if, as a result of any change in or amendment to the
laws, regulations or governmental policy having the force of law of any
Permitted Country (or of any political subdivision or taxing authority thereof
or therein) or any execution of or amendment to, any treaty or treaties
affecting taxation of which the Permitted Country (or such political subdivision
or taxing authority) is a party, which becomes effective on or after the date of
the Company's change in organizational jurisdiction (i) the Company is required,
or could be required on the next succeeding interest payment date, to pay
Additional Amounts in respect of payments on the Notes as a result of the
imposition of Taxes imposed by a Permitted Country (or any political subdivision
or taxing authority thereof) and (ii) the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the Company
that do not require undue effort or costs. In addition, the Company will also
pay to holders on the redemption date any Additional Amounts which would
otherwise be payable; PROVIDED, HOWEVER, that no such notice of redemption shall
be given earlier than 180 days prior to the earliest date on which the Company
could be obligated to pay such Additional Amounts if a payment in respect of the
Notes were then due.
Prior to the publication of the notice of redemption in accordance with
the foregoing, the Company shall deliver to the Trustee an officer's certificate
stating that (x) the Company is entitled to effect such redemption based on an
Opinion of Counsel or written advice of an independent tax counsel or accounting
firm, such opinion or advice being reasonably acceptable to the Trustee, that
the condition referred to in clause (i) of the immediately preceding paragraph
is satisfied as a result of such change, amendment or executed or amended treaty
and (y) the condition described in (ii) of the immediately preceding paragraph
is satisfied. Such notice, once delivered by the Company to the Trustee, will be
irrevocable.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
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<PAGE>
7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of
Control, each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of purchase (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Company will mail a notice to each Holder and the
Trustee describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
the Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
(b) If the Company or a Subsidiary consummates any Asset Sales permitted
by the Indenture, when the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall make an Asset Sale Offer to purchase the maximum
principal amount of Notes to which the Asset Sale Offer applies that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase, in accordance with the
procedures set forth in Section 1013 of the Indenture. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis, based on the
aggregate principal amount (or accreted value, as applicable) thereof
surrendered in such Asset Sale Offer. Upon the completion of an Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes initially issued are in
the form of a permanent Global Certificate, except as provided in this
Indenture. Under certain circumstances described in the Indenture, Notes may
also be issued in the form of permanent certificated Notes in registered form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of
A-4
<PAGE>
a majority in aggregate principal amount of the then outstanding Notes. Without
notice to or consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act, to secure the Notes or to add or
release any Subsidiary Guarantor pursuant to the terms of the Indenture;
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes; (iii) failure by
the Company to comply with the provisions of Sections 801, 1013 and 1017 of the
Indenture; (iv) failure by the Company or any Subsidiary Guarantor for 30 days
after notice from the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with any of its other
agreements in the Indenture or the Notes; (v) any Subsidiary Guarantee shall for
any reason cease to be, or be asserted by the Company or any Subsidiary
Guarantor, as applicable, not to be, in full force and effect (except pursuant
to the release of any such Subsidiary Guarantee in accordance with the
Indenture); (vi) failure by the Company or any of its Subsidiaries to pay
Indebtedness of the Company or any Subsidiary (other than Non-Recourse
Indebtedness or Limited Recourse Indebtedness) when due within the applicable
grace period, which Indebtedness exceeds $10 million; (vii) the entry of a
judgment in an uninsured or underdemnified aggregate amount in excess of $10.0
million, which judgment is not paid or discharged for a period of 30 days; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Subsidiaries that constitute a Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company, any Subsidiary that constitutes a
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required, upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
A-5
<PAGE>
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes, by accepting a Note, waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. SINKING FUND; ADDITIONAL AMOUNTS. There shall not be any sinking fund
with respect to the Notes. The Company shall not be obligated to pay Additional
Amounts with respect to the Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Pride International, Inc.
5847 San Felipe
Suite 3300
Houston, Texas 77057
Telephone No. (713) 789-1400
Telecopier No. (713) 952-6916
Attention: Robert Randall
A-6
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's Social Security or tax I.D. No.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:__________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee: /*/_________________
______________________________
/*/ Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 1013 or 1017 of the Indenture, check the box below:
[ ] Section 1013 [ ] Section 1017
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 1013 or Section 1017 of the Indenture, state the
amount you elect to have purchased:
$-----------
Date: Your Signature:___________________
(Sign exactly as your name appears
on the Note)
Tax Identification No.:___________
Signature Guarantee: /*/__________
_____________________
/*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-8
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE
The following exchanges of a part of this Global Certificate for
Definitive Notes have been made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
AMOUNT OF DECREASE AMOUNT OF INCREASE THIS GLOBAL SIGNATURE OF
IN PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT CERTIFICATE FOLLOWING AUTHORIZED OFFICER OF
OF THIS GLOBAL OF THIS GLOBAL SUCH DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE CERTIFICATE CERTIFICATE INCREASE) CUSTODIAN
- ------------------- ------------------------ --------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
</TABLE>
A-9
<PAGE>
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on premium and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
thereunder shall be promptly paid in full or performed, all in accordance with
the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantors to the Holders of Notes and
to the Trustee pursuant to this Subsidiary Guarantee are expressly set forth in
Article 14 of the Indenture, and reference is hereby made to such Article for
the precise terms of this Subsidiary Guarantee. The terms of Article 14 of the
Indenture are incorporated herein by reference.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's obligations under the Notes and
the Indenture and shall inure to the benefit of the Trustee and the Holders of
Notes and their successors and assigns and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. Notwithstanding the foregoing, the Subsidiary Guarantees may be
discharged in accordance with Article IV of the Indenture and any Subsidiary
Guarantor that satisfies the provisions of Section 1404 of the Indenture shall
be released of its obligations hereunder. This is a Subsidiary Guarantee of
payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the Indenture and
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee of the Notes was
entered into, after giving effect to the incurrence of existing Indebtedness
immediately prior to such time; provided that, it shall be a presumption in any
lawsuit or other proceeding in which such Subsidiary Guarantor is a party that
the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that,
B-1
<PAGE>
in making any determination as to the solvency or sufficiency of capital of a
Subsidiary Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and any
other rights such Subsidiary Guarantor may have, contractual or otherwise, shall
be taken into account.
Capitalized terms used herein have the same meanings given in that certain
Indenture dated as of May 1, 1997 between Pride Petroleum Services, Inc. and The
Chase Manhattan Bank, as Trustee, as supplemented by the Second Supplemental
Indenture dated as of May 26, 1999 between Pride International, Inc. and The
Chase Manhattan Bank, as Trustee, unless otherwise indicated.
[Name of Subsidiary Guarantor]
By:_________________________________
Name:_______________________________
Title:______________________________
B-2
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-2760086
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(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 of (I.R.S. employer
incorporation or organization) identification No.)
5847 SAN FELIPE
HOUSTON, TEXAS 77057
(Address of principal executive offices) (Zip Code)
SENIOR DEBT SECURITIES
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing 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 24th day of May, 1999.
THE CHASE MANHATTAN BANK
By /S/ L. O'BRIEN
/s/ L. O'Brien
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1998, in accordance with
a call made by the Federal Reserve Bank of this District pursuant to
the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
--------------
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .......................................... $ 13,915
Interest-bearing balances .................................. 7,805
Securities:
Held to maturity securities ................................... 1,429
Available for sale securities ................................. 56,327
Federal funds sold and securities purchased under
agreements to resell ....................................... 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income $131,095
Less: Allowance for loan and lease losses 2,711
Less: Allocated transfer risk reserve 0
Loans and leases, net of unearned income, --------
allowance, and reserve ..................................... 128,384
Trading Assets ................................................ 48,949
Premises and fixed assets (including capitalized
leases) .................................................. 3,095
Other real estate owned ....................................... 239
Investments in unconsolidated subsidiaries and
associated companies ....................................... 199
Customers' liability to this bank on acceptances
outstanding ................................................ 1,209
Intangible assets ............................................. 2,081
Other assets .................................................. 11,352
--------------
TOTAL ASSETS .................................................. $ 296,717
==============
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ........................................ $ 105,879
Noninterest-bearing ....................... $ 39,175
Interest-bearing .......................... 66,704
--------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ..................................... 79,294
Noninterest-bearing ....................... $ 4,082
Interest-bearing .......................... 75,212
Federal funds purchased and securities sold under agree-
ments to repurchase ........................................... 32,546
Demand notes issued to the U.S. Treasury ...................... 629
Trading liabilities ........................................... 36,807
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less .............. 4,478
With a remaining maturity of more than one year
through three years ................................. 213
With a remaining maturity of more than three years ..... 115
Bank's liability on acceptances executed and outstanding ...... 1,209
Subordinated notes and debentures ............................. 5,408
Other liabilities ............................................. 10,855
TOTAL LIABILITIES ............................................. 277,433
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................. 0
Common stock .................................................. 1,211
Surplus (exclude all surplus related to preferred stock) ..... 11,016
Undivided profits and capital reserves ........................ 6,762
Net unrealized holding gains (losses)
on available-for-sale securities .............................. 279
Cumulative foreign currency translation adjustments ........... 16
TOTAL EQUITY CAPITAL .......................................... 19,284
--------------
TOTAL LIABILITIES AND EQUITY CAPITAL .......................... $ 296,717
==============
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition 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.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE )DIRECTORS
WILLIAM B. HARRISON, JR. )
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