UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRIDE INTERNATIONAL, INC.
(Exact name of each registrant as specified in its charter)
DELAWARE 1389 76-0069030
(State or other jurisdiction (Primary standard industrial (I.R.S. employer
of incorporation or classification code number) identification number)
organization)
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5847 SAN FELIPE, SUITE 3300 W. GREGORY LOOSER
HOUSTON, TEXAS 77057 VICE PRESIDENT AND GENERAL COUNSEL
(713) 789-1400 PRIDE INTERNATIONAL, INC.
(Address, including zip code, and telephone number, including area code, 5847 SAN FELIPE, SUITE 3300
of each registrant's principal executive offices) HOUSTON, TEXAS 77057
(713) 789-1400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Securities Act"), check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier registration statement for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
7 3/8% Senior Notes due 2014............ $500,000,000 100% $500,000,000 $63,350
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(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 10, 2004
PROSPECTUS
[PRIDE INTERNATIONAL LOGO]
$500,000,000
OFFER TO EXCHANGE
7 3/8% SENIOR NOTES DUE 2014
FOR ALL OUTSTANDING
7 3/8% SENIOR NOTES DUE 2014
THE NEW NOTES
- will be freely tradeable and otherwise substantially identical to the old notes
- will accrue interest at 7 3/8% per annum, payable semiannually on each January 15 and July 15
- will not be listed on any securities exchange or on any automated dealer quotation system, but may be sold in the over-the-counter market, in negotiated transactions or through a combination of those methods
THE EXCHANGE OFFER
- expires at 5:00 p.m., New York City time, on ____ , 2004, unless extended
- is not conditioned upon any minimum aggregate principal amount of old notes being tendered
YOU SHOULD NOTE THAT
- we will exchange all old notes that are validly tendered and not validly withdrawn for an equal principal amount of new notes that we have registered under the Securities Act of 1933
- you may withdraw tenders of old notes at any time prior to the expiration of the exchange offer
- the exchange of old notes for new notes in the exchange offer should not be a taxable event for U.S. federal income tax purposes
- the exchange offer is subject to customary conditions, which we may waive in our sole discretion
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 8
OF THIS PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE NEW NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2004.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT US THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. SEE "WHERE YOU CAN FIND MORE INFORMATION" BEGINNING ON PAGE 69 FOR A LISTING OF DOCUMENTS WE INCORPORATE BY REFERENCE. THESE DOCUMENTS ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST DIRECTED TO PRIDE INTERNATIONAL, INC., 5847 SAN FELIPE, SUITE 3300, HOUSTON, TEXAS 77057, ATTENTION: W. GREGORY LOOSER, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY, TELEPHONE: (713) 789-1400. TO ENSURE TIMELY DELIVERY OF THESE DOCUMENTS, ANY REQUEST BY SHAREHOLDERS SHOULD BE MADE BY_________, 2004. THE EXHIBITS TO THESE DOCUMENTS WILL GENERALLY NOT BE MADE AVAILABLE UNLESS THEY ARE SPECIFICALLY INCORPORATED BY REFERENCE IN THE DOCUMENTS.
TABLE OF CONTENTS
Prospectus Summary........................................................ 2 Risk Factors.............................................................. 8 Forward-Looking Information............................................... 16 Ratio of Earnings to Fixed Charges........................................ 18 Private Placement......................................................... 18 Use of Proceeds........................................................... 18 The Exchange Offer........................................................ 19 Description of Notes...................................................... 29 United States Federal Income Tax Consequences............................. 69 Plan of Distribution...................................................... 69 Transfer Restrictions on Old Notes........................................ 71 Legal Matters............................................................. 71 Experts................................................................... 71 Independent Registered Public Accounting Firm............................. 71 Where You Can Find More Information....................................... 71 |
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THIS DOCUMENT AND THAT ANY INFORMATION WE HAVE INCORPORATED BY REFERENCE IS ACCURATE ONLY AS OF THE DATE OF THE DOCUMENT INCORPORATED BY REFERENCE.
PROSPECTUS SUMMARY
The following summary should be read together with the information contained in other parts of this prospectus and the documents we incorporate by reference. You should carefully read this prospectus and the documents we incorporate by reference to fully understand the terms of the exchange offer and the new notes as well as the other considerations that are important to you in making an investment decision. In this prospectus, we refer to Pride International, Inc. and its subsidiaries as "we," "us" or "Pride," unless we specifically indicate otherwise or the context clearly indicates otherwise.
OUR COMPANY
We are a leading international provider of contract drilling and related services. We provide contract drilling services to oil and gas exploration and production companies through the use of mobile offshore and land-based drilling rigs in both U.S. offshore and international offshore and land markets. As of June 30, 2004, we operated a global fleet of 328 rigs, including two ultra-deepwater drillships, 11 semisubmersible rigs, 35 jackup rigs, 31 tender-assisted, barge and platform rigs and 249 land-based drilling and workover rigs. We operate in more than 30 countries and marine provinces.
We are a Delaware corporation with our principal executive offices located at 5847 San Felipe, Suite 3300, Houston, Texas 77057. Our telephone number at such address is (713) 789-1400.
THE EXCHANGE OFFER
On July 7, 2004, we issued $500 million aggregate principal amount of the outstanding 7 3/8% Senior Notes due 2014. We sold the old notes in transactions that were exempt from or not subject to the registration requirements under the Securities Act of 1933. Accordingly, the old notes are subject to transfer restrictions. In general, you may not offer or sell the old notes unless either they are registered under the Securities Act or the offer or sale is exempt from or not subject to registration under the Securities Act and applicable state securities laws.
In connection with the sale of the old notes, we entered into a registration rights agreement with the initial purchasers of the old notes. We agreed to use our reasonable best efforts to have the registration statement of which this prospectus is a part declared effective by the SEC within 180 days after the issue date of the old notes and to complete the exchange offer for the notes within 45 days after the registration statement becomes effective. In the exchange offer, you are entitled to exchange your old notes for new notes with substantially identical terms, except that the existing transfer restrictions will be removed. You should read the discussion under the headings " -- Terms of the New Notes" and "Description of Notes" for further information about the new notes.
We have summarized the terms of the exchange offer below. You should read the discussion under the heading "The Exchange Offer" for further information about the exchange offer and resale of the new notes. IF YOU FAIL TO EXCHANGE YOUR OLD NOTES FOR NEW NOTES IN THE EXCHANGE OFFER, THE EXISTING TRANSFER RESTRICTIONS WILL REMAIN IN EFFECT AND THE MARKET VALUE OF YOUR OLD NOTES LIKELY WILL BE ADVERSELY AFFECTED BECAUSE OF A SMALLER FLOAT AND REDUCED LIQUIDITY.
Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. Please read "Plan of Distribution."
Expiration Date............................... The exchange offer will expire at 5:00 p.m., New York City time, on , 2004, or
such later date and time to which we extend it.
Withdrawal of Tenders......................... You may withdraw your tender of old notes at any time prior to the expiration date.
We will return to you, without charge, promptly after the expiration or termination
of the exchange offer, any old notes that you tendered but that were not accepted
for exchange.
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Conditions to the Exchange Offer.............. We will not be required to accept old notes for exchange:
- if the exchange offer would be unlawful or would violate any interpretation of
the staff of the SEC; or
- if any legal action has been instituted or threatened that would impair our
ability to proceed with the exchange offer.
The exchange offer is not conditioned upon any minimum aggregate principal amount
of old notes being tendered. Please read "The Exchange Offer -- Conditions to the
Exchange Offer" for more information about the conditions to the exchange offer.
Procedures for Tendering Old Notes............ If you wish to participate in the exchange offer, you must complete, sign and date
the letter of transmittal that we are providing with this prospectus and mail or
deliver the letter of transmittal, together with the old notes, to the exchange
agent. If your old notes are held through The Depository Trust Company, you may
effect delivery of the old notes by book-entry transfer.
In the alternative, if your old notes are held through DTC, you may participate in
the exchange offer through DTC's automated tender offer program. If you tender
under this program, you will agree to be bound by the letter of transmittal as
though you had signed it.
By signing or agreeing to be bound by the letter of transmittal, you will represent
to us that, among other things:
- any new notes that you receive will be acquired in the ordinary course of your
business;
- you have no arrangement or understanding with any person to participate in the
distribution of the old notes or the new notes;
- you are not our "affiliate," as defined in Rule 405 of the Securities Act, or,
if you are our affiliate, you will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
- if you are not a broker-dealer, you are not engaged in, and do not intend to
engage in, the distribution of the new notes;
- if you are a broker-dealer, you will receive new notes for your own account in
exchange for old notes that you acquired as a result of market-making
activities or other trading activities, and you will deliver a prospectus in
connection with any resale of such new notes;
- if you are a broker-dealer, you did not purchase the old notes to be exchanged
for the new notes from us; and
- you are not acting on behalf of any person who could not truthfully and
completely make the foregoing representations.
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Special Procedures for Beneficial
Owners........................................ If you own a beneficial interest in old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender the old notes in the exchange offer, please contact the registered holder as
soon as possible and instruct it to tender on your behalf and to comply with our
instructions described in this prospectus.
Guaranteed Delivery Procedures................ You must tender your old notes according to the guaranteed delivery procedures
described in "The Exchange Offer -- Guaranteed Delivery Procedures" if any of the
following apply:
- you wish to tender your old notes but they are not immediately available;
- you cannot deliver your old notes, the letter of transmittal or any other
required documents to the exchange agent prior to the expiration date; or
- you cannot comply with the applicable procedures under DTC's automated tender
offer program prior to the expiration date.
United States Federal Income Tax The exchange of old notes for new notes in the exchange offer should not be a
Consequences.................................. taxable event for U.S. federal income tax purposes. Please read "United States
Federal Income Tax Consequences."
Use of Proceeds............................... We will not receive any cash proceeds from the issuance of new notes in the
exchange offer.
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THE EXCHANGE AGENT
We have appointed JPMorgan Chase Bank as exchange agent for the exchange offer. Please direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent. If you are not tendering under DTC's automated tender offer program, you should send the letter of transmittal and any other required documents to the exchange agent as follows:
JPMORGAN CHASE BANK
(214) 468-6464
BY REGISTERED OR CERTIFIED MAIL:
JPMorgan Chase Bank
Institutional Trust Services
P.O. Box 2320
Dallas, Texas 75221-2320
Attention: Beth Mullin
BY HAND OR OVERNIGHT COURIER:
JPMorgan Chase Bank
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
Attention: Beth Mullin
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(214) 468-6494
Attention: Beth Mullin
Confirm by Telephone:
(214) 468-6464
For information call (214) 468-6464.
TERMS OF THE NEW NOTES
The new notes will be freely tradeable and otherwise substantially identical to the old notes. The new notes will not have registration rights or provisions for additional interest. The new notes will evidence the same debt as the old notes, and the old notes and the new notes will be governed by the same indenture. The old notes and the new notes will vote together as a single separate class under the indenture.
Notes Offered................................. $500 million aggregate principal amount of 7 3/8% Senior Notes due 2014.
Maturity Date................................. July 15, 2014.
Interest Payment Dates........................ January 15 and July 15 of each year, beginning January 15, 2005.
Ranking....................................... The new notes will rank senior in right of payment to all of our existing and
future subordinated debt and will rank equally in right of payment with all of our
existing and future senior debt. The new notes will be effectively subordinated to
all our existing and future secured debt, to the existing and future debt of our
subsidiaries that do not guarantee the new notes and to the existing and future
secured debt of any subsidiaries that guarantee the new notes. Initially, there
will be no subsidiary guarantors of the new notes. See "Description of Notes --
Ranking."
Guarantees.................................... In the circumstances described under "Description of Notes -- Restrictive Covenants
-- Limitation on Non-Guarantor Subsidiaries," some of our subsidiaries, if they
guarantee the payment of any of our debt (other than debt under our credit
facilities), will be required to guarantee the new notes on a senior unsecured
basis. Initially, there will be no subsidiary guarantors of the new notes.
Optional Redemption........................... We may redeem some or all of the new notes at any time on or after July 15, 2009.
Prior to July 15, 2009, we may redeem some or all of the new notes at 100% of the
principal amount plus a make-whole premium. In addition, prior to July 15, 2007, we
may redeem up to 35% of the new notes from the proceeds of certain equity offerings
at a specified redemption price. The redemption prices are discussed under the
caption "Description of Notes -- Optional Redemption."
Change in Control............................. If a change in control that results in a ratings decline (as described under
"Description of Notes -- Repurchase at Option of the Holder Upon a Change in
Control") occurs prior to maturity, you may require us to purchase all or part of
your new notes at a repurchase price equal to 101% of their principal amount, plus
accrued and unpaid interest.
Covenants..................................... The new notes will be issued under an indenture supplement that will limit our
ability and the ability of our subsidiaries to:
- enter into transactions with affiliates;
- pay dividends or make other restricted payments;
- incur more debt or issue preferred stock;
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- incur dividend or other payment restrictions affecting our subsidiaries;
- sell assets;
- engage in sale and leaseback transactions;
- create liens; and
- consolidate, merge or transfer all or substantially all of our assets.
Many of these restrictions will terminate if the new notes are rated investment
grade by either Standard & Poor's Ratings Services or Moody's Investors Service,
Inc and, in either case, the new notes have a specified rating by the other rating
agency.
Rights under Registration Rights Agreement.... If we fail to complete the exchange offer as required by the registration rights
agreement, we may be obligated to pay additional interest to holders of the old
notes. Please read "Description of Notes -- Registration Rights of the Noteholders"
for more information regarding your rights as a holder of old notes.
Risk Factors.................................. You should consider carefully all of the information included or incorporated by
reference in this prospectus. In particular, you should evaluate the risks set
forth under "Risk Factors" of this prospectus before making an investment decision.
Trading....................................... The notes will not be listed on any securities exchange or included in any
automated quotation system. Therefore, we cannot assure you as to the development
of an active market for the new notes or as to the liquidity of any such market.
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RISK FACTORS
You should carefully consider the risks described below before making an investment decision. The trading price of the notes could decline due to any of these risks, and you may lose all or part of your investment.
This prospectus and the documents we incorporate by reference herein also contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks faced by us described below and elsewhere in this prospectus and in the documents we incorporate by reference herein. See "Forward-Looking Information."
RISKS RELATED TO THE EXCHANGE OFFER
IF YOU FAIL TO EXCHANGE YOUR OLD NOTES, THE EXISTING TRANSFER RESTRICTIONS WILL REMAIN IN EFFECT AND THE MARKET VALUE OF YOUR OLD NOTES MAY BE ADVERSELY AFFECTED BECAUSE THEY MAY BE MORE DIFFICULT TO SELL.
If you fail to exchange your old notes for new notes under the exchange offer, then you will continue to be subject to the existing transfer restrictions on the old notes. In general, the old notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except in connection with this exchange offer or as required by the registration rights agreement, we do not intend to register resales of the old notes.
The tender of old notes under the exchange offer will reduce the principal amount of the old notes outstanding. Due to the corresponding reduction in liquidity, this may have an adverse effect upon, and increase the volatility of, the market price of any old notes that you continue to hold following completion of the exchange offer.
RISKS RELATED TO OUR BUSINESS
COST OVERRUNS ON OUR LUMP-SUM CONSTRUCTION CONTRACTS HAVE RESULTED IN
LOSSES ON THOSE CONTRACTS AND MAY CONTINUE TO DO SO IN THE FUTURE.
Our Technical Services segment is performing four deepwater platform rig construction projects under lump-sum contracts with our customers. As of July 31, 2004, three of these rigs had been delivered to the customers. We recorded loss provisions totaling $98.4 million during 2003, and additional loss provisions totaling $31.8 million during the first six months of 2004, as a result of cost overruns on these projects. The loss provisions included costs incurred plus our estimate of costs we expected to incur to complete the projects. In connection with the preparation of our quarterly consolidated financial statements, following the end of each quarter we update our evaluation of our contract price and cost estimates related to the projects, and we reflect in our results of operations any revisions in these estimates based on that evaluation. A variety of events we evaluate could require us to revise these estimates and could result in further cost overruns to complete these projects, which could be material and which would require us to record additional loss provisions. Such events could include variations in labor and equipment productivity over the remaining construction period, unanticipated cost increases, engineering changes, shipyard or systems problems, project management issues, shortages of equipment, materials or skilled labor, weather delays, unscheduled delays in the delivery of ordered materials and equipment, work stoppages, shipyard unavailability or other delays.
WE RECOGNIZE REVENUES AND RELATED COSTS UNDER OUR CONTRACTS IN THE TECHNICAL SERVICES SEGMENT ON A PERCENTAGE-OF-COMPLETION BASIS. ADJUSTMENTS IN ESTIMATES COULD RESULT IN A CHARGE AGAINST EARNINGS, WHICH COULD BE MATERIAL.
We recognize revenues and related costs under contracts in our Technical
Services segment on a percentage-of-completion basis. Accordingly, we review
contract price and cost estimates quarterly and reflect adjustments in income
(1) to recognize income proportionate to the percentage of completion in the
case of projects showing an estimated profit at completion and (2) to recognize
the entire amount of the loss in the case of projects showing an estimated loss
at completion. To the extent these adjustments result in an increase in
previously reported losses or a reduction in or an elimination of previously
reported profits with respect to a project, we would recognize a charge against
current earnings, which could be material.
A MATERIAL OR EXTENDED DECLINE IN EXPENDITURES BY OIL AND GAS COMPANIES, DUE TO A DECLINE OR VOLATILITY IN OIL AND GAS PRICES, A DECREASE IN DEMAND FOR OIL AND GAS OR OTHER FACTORS, MAY REDUCE DEMAND FOR OUR SERVICES AND SUBSTANTIALLY REDUCE OUR PROFITABILITY OR RESULT IN OUR INCURRING LOSSES.
The profitability of our operations depends upon conditions in the oil and gas industry and, specifically, the level of exploration and production expenditures of oil and gas company customers. The oil and gas industry is cyclical. The demand for contract drilling and related services is directly influenced by many factors beyond our control, including:
- oil and gas prices and expectations about future prices;
- the demand for oil and gas;
- the cost of producing and delivering oil and gas;
- advances in exploration, development and production technology;
- government regulations;
- local and international political and economic conditions;
- the ability of the Organization of Petroleum Exporting Countries ("OPEC") to set and maintain production levels and prices;
- the level of production by non-OPEC countries; and
- the policies of various governments regarding exploration and development of their oil and gas reserves.
Depending on the market prices of oil and gas, companies exploring for oil and gas may cancel or curtail their drilling programs, thereby reducing demand for drilling services. Such a reduction in demand may erode daily rates and utilization of our rigs. Any significant decrease in daily rates or utilization of our rigs, particularly our high-specification semisubmersible rigs or jackup rigs, could materially reduce our revenues and profitability.
AN OVERSUPPLY OF COMPARABLE RIGS IN THE GEOGRAPHIC MARKETS IN WHICH WE COMPETE COULD DEPRESS THE UTILIZATION RATES AND DAYRATES FOR OUR RIGS AND MATERIALLY REDUCE OUR REVENUES AND PROFITABILITY.
Utilization rates, which are the number of days a rig actually works divided by the number of days the rig is available for work, and dayrates, which are the contract prices customers pay for rigs per day, are also affected by the total supply of comparable rigs available for service in the geographic markets in which we compete. Improvements in demand in a geographic market may cause our competitors to respond by moving competing rigs into the market, thus intensifying price competition. Significant new rig construction could also intensify price competition. In the past, there have been prolonged periods of rig oversupply with correspondingly depressed utilization rates and dayrates largely due to earlier, speculative construction of new rigs. Improvements in dayrates and expectations of longer-term, sustained improvements in utilization rates and dayrates for offshore drilling rigs may lead to construction of new rigs. These increases in the supply of rigs could depress the utilization rates and dayrates for our rigs and materially reduce our revenues and profitability.
WARRANTY CLAIMS ASSERTED AGAINST US IN THE FUTURE COULD MATERIALLY AFFECT
OUR BUSINESS.
In connection with our deepwater platform rig construction projects, we have provided our customers with a limited warranty against manufacturing defects on the rigs and have included in the construction losses a provision for warranty claims. However, our actual level of warranty claims could be greater than the level of warranty claims we estimated at the time of the provision, which would result in further losses on the projects.
IF WE ARE UNABLE TO OBTAIN NEW OR FAVORABLE CONTRACTS FOR RIGS WHOSE CONTRACTS ARE EXPIRING, OUR REVENUES AND PROFITABILITY COULD BE MATERIALLY REDUCED.
We have a number of contracts that will expire in 2004. Our ability to renew these contracts or obtain new contracts and the terms of any such contracts will depend on market conditions. We may be unable to renew our expiring contracts or obtain new contracts for the rigs, and the dayrates under any new contracts may be substantially below the existing dayrates, which could materially reduce our revenues and profitability.
WORLDWIDE POLITICAL AND ECONOMIC DEVELOPMENTS MAY HURT OUR OPERATIONS
MATERIALLY.
In 2003, we derived approximately 39% of our revenues from operations in countries within South America and an additional approximately 48% of our revenues from operations in all other countries outside the United States. Our operations in these areas are subject to the following risks, among others:
- foreign currency fluctuations and devaluation;
- new economic policies;
- restrictions on currency repatriation;
- political instability, war and civil disturbances;
- uncertainty or instability resulting from armed hostilities or other crises in the Middle East or other geographic areas in which we operate; and
- acts of terrorism.
Continued hostilities in the Middle East and the occurrence or threat of future terrorist attacks such as those against the United States on September 11, 2001 could cause a downturn in the economies of the United States and other developed countries. A lower level of economic activity could result in a decline in energy consumption, which could cause our revenues and margins to decline and limit our future growth prospects. More specifically, these risks could lead to increased volatility in prices for crude oil and natural gas and could affect the markets for our drilling services. In addition, these risks could increase instability in the financial and insurance markets and make it more difficult for us to access capital and to obtain insurance coverages that we consider adequate or are otherwise required by our contracts.
We attempt to limit the risks of currency fluctuation and restrictions on currency repatriation where possible by obtaining contracts providing for payment in U.S. dollars or freely convertible foreign currency. To the extent possible, we seek to limit our exposure to local currencies by matching the acceptance of local currencies to our expense requirements in those currencies. Although we have done this in the past, we may not be able to take these actions in the future, thereby exposing us to foreign currency fluctuations that could cause our results of operations and financial condition to deteriorate materially.
During 2003, approximately 25% of our consolidated revenues were derived from our operations in Argentina and Venezuela. Over the past two years, these two countries experienced political and economic instability that resulted in significant changes in their general economic policies and regulations.
During 2002, the Argentine peso declined in value against the U.S. dollar following the Argentine government's decisions to abandon the country's fixed dollar-to-peso exchange rate, requiring private sector, dollar-denominated loans and contracts to be paid in pesos and placing restrictions on the convertibility of the Argentine peso. The devaluation, coupled with the government's mandated conversion of all dollar-based contracts to pesos, severely pressured our margins. During 2002, we engaged in discussion with all of our Argentine customers regarding the recovery of losses sustained from the devaluation of accounts receivable and the basis on which new business would be contracted. We have restructured most of our contracts on a basis that we believe limits our exposure to further devaluations. However, further devaluations may cause our results to suffer materially.
Since the second quarter of 2002, Venezuela has experienced political, economic and social instability, including prolonged labor strikes, demonstrations and an attempt to overthrow the government. Much of the instability negatively impacted Petroleos de Venezuela, S.A., or PDVSA, which is our principal customer in Venezuela, and led to the dismissal of more than 18,000 employees by the government. Exchange controls, together with employee dismissals and reorganization within PDVSA, led to a slower rate of collection of our trade receivables in early 2003. The instability in Venezuela has had and may in the future have an adverse effect on our business.
Although foreign exchange in the other countries where we operate is currently carried out on a free-market basis, local monetary authorities in these countries may, in the future, implement exchange controls or other economic measures that would limit or restrict our rights to receive payments or to otherwise conduct business in these countries.
From time to time, certain of our foreign subsidiaries operate in countries that are subject to sanctions and embargoes imposed by the U.S. government and the United Nations. Although these sanctions and embargoes do not prohibit those subsidiaries from completing existing contracts or from entering into new contracts to provide drilling services in such countries, they do prohibit us and our domestic subsidiaries, as well as employees of our foreign subsidiaries who are U.S. citizens, from participating in or approving any aspect of the business activities in those countries. These constraints on our ability to have U.S. persons, including our senior management, provide managerial oversight and supervision may negatively affect the financial or operating performance of such business activities. We have received a request for information from the U.S. Department of Treasury's Office of Foreign Assets Control regarding our involvement in the business activities of certain of our foreign subsidiaries in Libya and Iran, and we have provided information pursuant to that request.
Our international operations are also subject to other risks, including foreign monetary and tax policies, expropriation, nationalization and nullification or modification of contracts. Additionally, our ability to compete in international contract drilling markets may be limited by foreign governmental regulations that favor or require the awarding of contracts to local contractors or by regulations requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. Furthermore, our foreign subsidiaries may face governmentally imposed restrictions from time to time on their ability to transfer funds to us.
For further information about our international operations, including our results of operations by geographic area, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" and to note 15 of our notes to consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2003 and in our periodic reports filed with the SEC.
OUR CUSTOMERS MAY SEEK TO CANCEL OR RENEGOTIATE SOME OF OUR DRILLING CONTRACTS DURING PERIODS OF DEPRESSED MARKET CONDITIONS OR IF WE EXPERIENCE OPERATIONAL DIFFICULTIES.
Substantially all our contracts with major customers are dayrate contracts, where we charge a fixed charge per day regardless of the number of days needed to drill the well. During depressed market conditions, a customer may no longer need a rig that is currently under contract or may be able to obtain a comparable rig at a lower daily rate. As a result, customers may seek to renegotiate the terms of their existing drilling contracts or avoid their obligations under those contracts. In addition, our customers may have the right to terminate existing contracts if we experience operational problems. The likelihood that a customer may seek to terminate a contract for operational difficulties is increased during periods of market weakness. The cancellation of a number of our drilling contracts could materially reduce our revenues and profitability.
OUR SIGNIFICANT DEBT LEVELS AND DEBT AGREEMENT RESTRICTIONS MAY LIMIT OUR LIQUIDITY AND FLEXIBILITY IN OBTAINING ADDITIONAL FINANCING AND IN PURSUING OTHER BUSINESS OPPORTUNITIES.
As of June 30, 2004, we had approximately $1.8 billion in long-term debt and capital lease obligations. The level of our indebtedness will have several important effects on our future operations, including:
- a significant portion of our cash flow from operations will be dedicated to the payment of interest and principal on such debt and will not be available for other purposes;
- covenants contained in our debt arrangements require us to meet certain financial tests, which may affect our flexibility in planning for, and reacting to, changes in our business and may limit our ability to dispose of assets, withstand current or future economic or industry downturns and compete with others in our industry for strategic opportunities; and
- our ability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate and other purposes may be limited.
Our ability to meet our debt service obligations and to reduce our total indebtedness will be dependent upon our future performance, which will be subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control.
WE ARE SUBJECT TO A NUMBER OF OPERATING HAZARDS INCLUDING THOSE SPECIFIC TO MARINE OPERATIONS. WE MAY NOT HAVE INSURANCE TO COVER ALL THESE HAZARDS.
Our operations are subject to the many hazards customary in the oilfield services industry. Contract drilling and well servicing require the use of heavy equipment and exposure to hazardous conditions, which may subject us to liability claims by employees, customers and third parties. These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage and suspension of operations. Our offshore fleet is also subject to hazards inherent in marine operations, either while on site or during mobilization, such as capsizing, sinking and damage from severe weather conditions. We customarily provide contract indemnity to our customers for:
- claims that could be asserted by us relating to damage to or loss of our equipment, including rigs;
- claims that could be asserted by us or our employees relating to personal injury or loss of life; and
- legal and financial consequences of spills of industrial waste and other liquids, but only to the extent (1) the waste or other liquids were in our control at the time of the spill or (2) our level of culpability is greater than mere negligence.
We maintain insurance for injuries to our employees, damage to or loss of our equipment and other insurance coverage for normal business risks, including general liability insurance. Any insurance protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. In addition, some of our primary insurance policies have substantial per occurrence or annual deductibles and/or self-insured aggregate amounts. The occurrence of a significant event against which we are not fully insured, or of a number of lesser events against which we are insured, but subject to substantial deductibles, could materially increase our costs and impair our profitability and financial condition. Moreover, worldwide terrorist attacks have significantly increased premiums for some types of coverage. We may not be able to maintain adequate insurance at rates or on terms that we consider reasonable or acceptable.
WE ARE SUBJECT TO NUMEROUS GOVERNMENTAL REGULATIONS, INCLUDING THOSE THAT
MAY IMPOSE SIGNIFICANT LIABILITY ON US FOR ENVIRONMENTAL DAMAGE.
Many aspects of our operations are subject to governmental regulations that may relate directly or indirectly to the contract drilling and well servicing industries, including those requiring us to control the discharge of oil and other contaminants or otherwise relating to protection of the environment. Our operations and activities are subject to numerous environmental laws and regulations, including the U.S. Oil Pollution Act of 1990, the U.S. Outer Continental Shelf Lands Act, and the Comprehensive Environmental Response, Compensation and Liability Act. Additionally, other countries where we operate have laws and regulations covering the discharge of oil and other contaminants in connection with operations. Laws and regulations protecting the environment have become more stringent in recent years and may in certain circumstances impose strict liability, rendering us liable for environmental damage without regard to negligence or fault on our part. These laws and regulations may expose us to liability for the conduct of, or conditions caused by, others or for acts that were in compliance with all applicable laws at the time the acts were performed. The application of these requirements, the modification of existing laws or regulations or the adoption of new laws or regulations curtailing exploratory or development drilling for oil and gas could materially limit future contract drilling opportunities or materially increase our costs or both.
WE MAY HAVE DIFFICULTY IMPLEMENTING IN A TIMELY MANNER INTERNAL CONTROL
PROCEDURES NECESSARY TO ALLOW OUR MANAGEMENT TO REPORT ON THE EFFECTIVENESS OF OUR INTERNAL CONTROLS. IN ADDITION, OUR INDEPENDENT AUDITORS MAY NOT BE ABLE TO ISSUE AN ATTESTATION REPORT ON MANAGEMENT'S ASSESSMENT.
Beginning with our report for the year ending December 31, 2004, Section 404 of the Sarbanes-Oxley Act of 2002 will require us to include an internal control report of management with our annual report on Form 10-K, which is to include management's assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. That report will also be required to include a statement that our independent auditors have issued an attestation report on management's assessment of our internal control over financial reporting. Our independent auditors, PricewaterhouseCoopers LLP, issued a letter to our audit committee dated August 13, 2003 noting certain matters in our Technical Services segment that they considered to be a material weakness in internal control.
In order to achieve compliance with Section 404 within the prescribed period, management has formed an internal control steering committee, engaged outside consultants and adopted a detailed project work plan to assess the adequacy of our internal control over financial reporting, remediate any control weaknesses that may be identified, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. We may not, however, be able to complete the work necessary for our management to issue its management report in a timely manner, or any work that will be required for our management to be able to report that our internal control over financial reporting is effective. In addition, our independent auditors may not be able to issue an attestation report on management's assessment.
MANY OF OUR CONTRACTS WITH OUR CUSTOMERS FOR OUR OFFSHORE RIGS ARE FIXED DAYRATE CONTRACTS. INCREASES IN OUR COSTS, WHICH ARE UNPREDICTABLE AND FLUCTUATE BASED ON EVENTS OUTSIDE OUR CONTROL, COULD ADVERSELY IMPACT OUR PROFITABILITY ON THOSE CONTRACTS.
A number of our contracts with our customers for our offshore rigs are on a fixed dayrate basis. However, many of our costs, such as labor costs, are unpredictable and fluctuate based on events outside our control. The gross margin we realize on these fixed dayrate contracts will often fluctuate based on, among other things, variations in labor and other costs over the term of the contract. A substantial increase in our costs associated with these contracts would adversely impact our profitability.
RISKS RELATED TO THE NOTES
THE NOTES ARE OUR SENIOR UNSECURED OBLIGATIONS. AS SUCH, THE NOTES ARE EFFECTIVELY SUBORDINATED TO ALL OUR EXISTING AND FUTURE SECURED DEBT, TO THE EXISTING AND FUTURE DEBT OF OUR SUBSIDIARIES THAT DO NOT GUARANTEE THE NOTES AND TO THE EXISTING AND FUTURE SECURED DEBT OF ANY SUBSIDIARIES THAT GUARANTEE THE NOTES. FURTHERMORE, AS A HOLDING COMPANY, WE DEPEND ON CASH WE OBTAIN FROM OUR SUBSIDIARIES TO MEET OUR DEBT SERVICE OBLIGATIONS.
The notes constitute our senior unsecured debt and rank equally in right of payment with all of our other existing and future senior debt and senior in right of payment to all of our existing and future subordinated debt. The notes are effectively subordinated to all our existing and future secured debt, to the existing and future debt of our subsidiaries that do not guarantee the notes and to the existing and future secured debt of any subsidiaries that guarantee the notes. There currently are no subsidiary guarantors. If we are involved in any dissolution, liquidation or reorganization, our secured debt holders would be paid before you receive any amounts due under the notes to the extent of the value of the assets securing their debt. In that event, you may not be able to recover any principal or interest you are due under the notes.
We currently conduct our operations through both U.S. and foreign subsidiaries, and our operating income and cash flow are generated by our subsidiaries. As a result, cash we obtain from our subsidiaries is the principal source of funds necessary to meet our debt service obligations. Contractual provisions or laws, as well as our subsidiaries' financial condition and operating requirements, may limit our ability to obtain cash from our subsidiaries that we require to pay our debt service obligations, including payments on the notes. In addition, holders of the notes will have a junior position to the claims of creditors, including trade creditors and tort claimants, of our subsidiaries that do not guarantee the notes and to all secured creditors of our subsidiaries, whether or not they guarantee the notes, with respect to the assets securing the claims of those secured creditors.
As of June 30, 2004, as adjusted for the issuance of the old notes, completion of our new revolving credit facility and term loan on the same date as the issuance of the old notes and the use of the net proceeds from these transactions, including borrowings of $147.4 million under the revolving credit facility, to repay debt as described under "Private Placement," we would have had outstanding $1.1 billion of unsecured and unsubordinated indebtedness, no secured debt and $1.1 million of subordinated indebtedness (in each case excluding guarantees of indebtedness of our subsidiaries), and our subsidiaries would have had outstanding $2.2 million of unsecured and unsubordinated indebtedness, $1.0 billion of secured indebtedness and no subordinated indebtedness, in each case excluding intercompany indebtedness.
FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO
VOID SUBSIDIARY GUARANTEES.
The indenture governing the notes does not require any subsidiary to guarantee the notes unless that subsidiary guarantees any of our other indebtedness (excluding our indebtedness under credit facilities) as described under "Description of Notes -- Restrictive Covenants -- Limitation on Non-Guarantor Subsidiaries." There currently are no subsidiary guarantors. Various fraudulent conveyance laws have been enacted for the protection of creditors, and a court may use these laws to subordinate or avoid any subsidiary guarantee that may be delivered in the future. A court could avoid or subordinate a subsidiary guarantee in favor of that subsidiary guarantor's other creditors if the court found that either:
- the guarantee was incurred with the intent to hinder, delay or defraud any present or future creditor or the subsidiary guarantor contemplated insolvency with a design to favor one or more creditors to the exclusion in whole or in part of others; or
- the subsidiary guarantor did not receive fair consideration or reasonably equivalent value for issuing its subsidiary guarantee;
and, in either case, the subsidiary guarantor, at the time it issued the subsidiary guarantee:
- was insolvent or rendered insolvent by reason of the issuance of the subsidiary guarantee;
- was engaged or about to engage in a business or transaction for which its remaining assets constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured.
Among other things, a legal challenge of the subsidiary guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by the subsidiary guarantor as a result of our issuance of the notes or the delivery of the subsidiary guarantee. To the extent the subsidiary guarantee was avoided as a fraudulent conveyance or held unenforceable for any other reason, the holders of the notes would cease to have any claim against that subsidiary guarantor and would be solely creditors of the parent company and of any subsidiary guarantors whose subsidiary guarantees were not avoided or held unenforceable. In that event, the claims of the holders of the notes against the issuer of an invalid subsidiary guarantee would be subject to the prior payment of all liabilities of that subsidiary guarantor.
WE ARE REQUIRED TO PURCHASE THE NOTES IN CONNECTION WITH A CHANGE IN CONTROL ONLY IF THE RATINGS ON THE NOTES DECLINE. IN ADDITION, IT MAY NOT BE POSSIBLE FOR US TO PURCHASE THE NOTES ON THE OCCURRENCE OF SUCH A CHANGE IN CONTROL.
We are required to offer to repurchase the notes only in connection with specified change in control events that result in a ratings decline. Change in control provisions of other outstanding debt may require a repurchase if a change in control occurs without requiring a ratings decline. Accordingly, if a change in control were to occur that does not result in a rating decline, we could be required to repurchase other outstanding debt, but we would not be required to offer to repurchase the notes. We may not have sufficient funds available or be able to obtain the financing necessary to make any of the debt payments, including purchases of the notes, described above.
If we were required to purchase the notes and we did not have the funds or financing available to make the debt payments, including purchases of the notes, an event of default would be triggered under the indenture governing the notes and certain other debt instruments. Each of these defaults could have a material adverse effect on us and the holders of the notes. See "Description of Notes -- Repurchase at Option of the Holder Upon a Change in Control."
BECAUSE THERE IS NO PUBLIC MARKET FOR THE NOTES, YOU MAY NOT BE ABLE TO
RESELL THE NOTES EASILY OR AT A FAVORABLE PRICE.
There is no public market for the notes. A market for the notes may not develop, and we are not certain of the liquidity of any market they may develop, the ability of the holders to sell their notes or the price at which holders would be able to sell their notes. If a market were to develop, the market price for the notes may be adversely affected by changes in our financial performance, changes in the overall market for similar securities and performances or prospects for companies in our industry.
FORWARD-LOOKING INFORMATION
This prospectus, including the information we incorporate by reference, includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included in this prospectus or the documents we incorporate by reference that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These include such matters as:
- market conditions, expansion and other development trends in the contract drilling industry;
- our ability to enter into new contracts for our rigs and future utilization rates and contract rates for rigs;
- future capital expenditures and investments in the construction, acquisition and refurbishment of rigs (including the amount and nature thereof and the timing of completion thereof);
- estimates of profit or loss from performance of lump-sum rig construction contracts;
- future asset sales;
- completion and employment of rigs under construction;
- repayment of debt;
- utilization of net operating loss carryforwards and future effective income tax rates;
- business strategies;
- expansion and growth of operations;
- future exposure to currency devaluations or exchange rate fluctuations;
- expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash flows;
- future operating results and financial condition; and
- the effectiveness of our disclosure controls and procedures and internal control over financial reporting.
We have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. These statements are subject to a number of assumptions, risks and uncertainties, including those described above under "Risk Factors" and in our SEC filings and the following:
- general economic business conditions;
- prices of oil and gas and industry expectations about future prices;
- cost overruns in our lump-sum rig construction and other turnkey contracts;
- adjustments in estimates affecting our revenue recognition under percentage-of-completion accounting;
- foreign exchange controls and currency fluctuations;
- political stability in the countries in which we operate;
- the business opportunities (or lack thereof) that may be presented to and pursued by us;
- changes in laws or regulations;
- the validity of the assumptions used in the design of our disclosure controls and procedures; and
- our ability to implement in a timely manner internal control procedures necessary to allow our management to report on the effectiveness of our internal control over financial reporting.
Most of these factors are beyond our control. We caution you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in these statements.
RATIO OF EARNINGS TO FIXED CHARGES
We have presented in the table below our historical consolidated ratio of earnings to fixed charges for the periods shown.
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED ------------------------------------
JUNE 30,
2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges....................... 1.3x 1.0x 1.1x 1.9x 1.7x --
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We have computed the ratios of earnings to fixed charges by dividing earnings by fixed charges. For this purpose, "earnings" consist of earnings before income taxes and minority interest plus fixed charges less capitalized interest. "Fixed charges" consist of interest expense, capitalized interest and that portion of operating lease rental expense we have deemed to represent the interest factor. For the year ended December 31, 1999, earnings were inadequate to cover fixed charges by $114.6 million.
PRIVATE PLACEMENT
On July 7, 2004, we issued the $500 million principal amount of the outstanding 7 3/8% Senior Notes due 2014 to the initial purchasers of those notes and received proceeds, after discounts but before other expenses, of $491.1 million. We issued the old notes to the initial purchasers in transactions exempt from or not subject to registration under the Securities Act. The initial purchasers then offered and resold the notes to qualified institutional buyers and non-U.S. persons initially at 99.474% of the principal amount of the old notes. In addition, on the same date, we entered into new senior secured credit facilities with a group of banks and institutional lenders for aggregate availability of up to $800 million, consisting of a revolving credit facility with availability of up to $500 million and a $300 million term loan.
We used the net proceeds from the offering of the old notes, together with proceeds from the new term loan and initial borrowings of approximately $95 million under the revolving credit facility, to retire our 9 3/8% Senior Notes due 2007, 10% Senior Notes due 2009 and 9% senior convertible notes, together with the applicable prepayment premium and accrued and unpaid interest, and to refinance amounts outstanding under other credit facilities.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes, we will receive in exchange a like principal amount of old notes. The old notes surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the new notes will not result in any change in our capitalization.
THE EXCHANGE OFFER
Participation in the exchange offer is voluntary, and we urge you to carefully consider whether to accept. Please consult your financial and tax advisors in making your own decision on what action to take.
We are offering to issue new registered 7 3/8% Senior Notes due 2014 in exchange for a like principal amount of our outstanding 7 3/8% Senior Notes due 2014. We may extend, delay or terminate the exchange offer. Holders of old notes who wish to exchange their notes will need to complete the exchange offer documentation related to the exchange.
PURPOSE OF THE EXCHANGE OFFER
We sold the old notes in transactions that were exempt from or not subject to the registration requirements under the Securities Act. Accordingly, the old notes are subject to transfer restrictions. In general, you may not offer or sell the old notes unless either they are registered under the Securities Act or the offer or sale is exempt from or not subject to registration under the Securities Act and applicable state securities laws.
In connection with the sale of the old notes, we entered into a registration rights agreement with the initial purchasers of the old notes. In that agreement, we agreed to use our reasonable best efforts to file a registration statement relating to an offer to exchange the old notes for new notes and to have that registration statement declared effective by the SEC within 180 days after the issue date of the old notes. We also agreed to use our reasonable best efforts to complete the exchange offer within 45 days after the registration statement becomes effective. We are offering the new notes under this prospectus in an exchange offer for the old notes to satisfy our obligations under the registration rights agreement.
RESALE OF NEW NOTES
Based on interpretations of the SEC staff in "no action letters" issued to third parties, we believe that each new note issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act if:
- you are not our "affiliate" within the meaning of Rule 405 under the Securities Act;
- you acquire such new notes in the ordinary course of your business; and
- you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of new notes.
The SEC has not, however, considered the legality of our exchange offer in the context of a "no action letter," and there can be no assurance that the staff of the SEC would make a similar determination with respect to our exchange offer as it has in other interpretations to other parties.
If you tender your old notes in the exchange offer with the intention of participating in any manner in a distribution of the new notes, you:
- cannot rely on such interpretations by the SEC staff; and
- must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the new notes.
Unless an exemption from registration is otherwise available, the resale by any securityholder intending to distribute new notes should be covered by an effective registration statement under the Securities Act containing the selling securityholder's information required by Item 507 or Item 508, as applicable, of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other retransfer of new notes only as specifically described in this prospectus. Failure to comply with the registration and prospectus delivery requirements by a holder subject to these requirements could result in that holder incurring liability for which it is not indemnified by us. With respect to broker-dealers, only those that acquired the old notes for their own account as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives new notes for its own account in exchange for old notes acquired as a result of market-making activities or other trading activities may be deemed to be an "underwriter" within the meaning of the Securities Act and must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. Please read "Plan of Distribution" for more details regarding the transfer of new notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to the expiration date of the exchange offer. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes surrendered under the exchange offer. Old notes may be tendered only in integral multiples of $1,000. The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange.
As of the date of this prospectus, $500 million principal amount of 7 3/8% Senior Notes due 2014 is outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the SEC. Old notes that are not tendered for exchange in the exchange offer will:
- remain outstanding;
- continue to accrue interest; and
- be entitled to the rights and benefits that holders have under the indenture relating to the old notes and, if applicable, the registration rights agreement.
However, these old notes will not be freely tradable. See " -- Consequences of Failure to Exchange" below.
By signing or agreeing to be bound by the letter of transmittal, you acknowledge that, upon request, you will execute and deliver any additional documents deemed by the exchange agent or us to be necessary or desirable to complete the exchange, assignment and transfer of the old notes tendered by you, including the transfer of such old notes on the account books maintained by DTC.
We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us.
If you tender old notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section " -- Fees and Expenses" for more details about fees and expenses incurred in the exchange offer.
We will return any old notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the applicable exchange offer.
EXPIRATION DATE
The exchange offer will expire at 5:00 p.m., New York City time, on , 2004, unless in our sole discretion we extend it.
EXTENSIONS, DELAY IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. We may delay acceptance for exchange of any old notes by giving oral or written notice of the extension to their holders. During any such extensions, all old notes you have previously tendered and not withdrawn will remain subject to the exchange offer, and we may accept them for exchange.
To extend an exchange offer, we will notify the exchange agent orally or in writing of any extension. We also will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.
If any of the conditions described below under " -- Conditions to the Exchange Offer" have not been satisfied with respect to the exchange offer, we reserve the right, in our sole discretion to:
- delay accepting for exchange any old notes;
- extend the exchange offer; or
- terminate the exchange offer.
We will give oral or written notice of such delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of the old notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose that amendment by means of a prospectus supplement. We will distribute the supplement to the registered holders of the old notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during such period.
Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency.
Conditions to the Exchange Offer
Despite any other term of the exchange offer, if in our reasonable judgment the exchange offer, or the making of any exchange by a holder of old notes, would violate applicable law or any applicable interpretation of the staff of the SEC (due to a change in its current interpretations) or would be impaired by any action or proceeding that has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer:
- we will not be required to accept for exchange, or exchange any new notes for, any old notes; and
- we may terminate the exchange offer before accepting any old notes for exchange.
In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us:
- the representations described below under " -- Procedures for Tendering" and in the letter of transmittal; and
- such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registering the new notes under the Securities Act.
We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any old notes not previously accepted for exchange in the exchange offer, upon the occurrence of any of the conditions to the exchange offer specified above.
These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. Our failure at any time to exercise any of these rights will not mean that we have waived our rights. Each right will be deemed an ongoing right that we may assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered, and will not issue new notes in exchange for any such old notes, if at that time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939.
PROCEDURES FOR TENDERING
HOW TO TENDER GENERALLY
Only a registered holder of old notes may tender its old notes in the
exchange offer. If you are a beneficial owner of old notes and wish to have the
registered owner tender on your behalf, please read " -- How to Tender If You
Are a Beneficial Owner." To tender in the exchange offer, a holder must either
(1) comply with the procedures for physical tender or (2) comply with the
automated tender offer program procedures of The Depository Trust Company, or
DTC, described below.
To complete a physical tender, a holder must:
- complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal;
- have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and
- mail or deliver the letter of transmittal or facsimile and deliver the old notes to the exchange agent prior to the expiration date.
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided above under "Prospectus Summary -- The Exchange Agent" prior to the expiration date. To complete a tender through DTC's automated tender offer program, the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of such old notes into the exchange agent's account at DTC according to the procedure for book-entry transfer described below and a properly transmitted agent's message.
If you wish to tender your old notes and cannot comply with the requirement to deliver the letter of transmittal and your old notes (including by book-entry transfer) or use the automated tender offer program of DTC described below before the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures described below.
The tender by a holder that is not withdrawn prior to the expiration date and our acceptance of that tender will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK. RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR OLD NOTES TO US. YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect to the old notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC's system may make book-entry delivery of old notes by causing DTC to transfer such old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. If you are unable to deliver confirmation of the book-entry tender of your old notes into the exchange agent's account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date, you must tender your old notes according to the guaranteed delivery procedures described below.
TENDERING THROUGH DTC'S AUTOMATED TENDER OFFER PROGRAM
The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use DTC's automated tender offer program to tender its old notes. Accordingly, participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the old notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent's message to the exchange agent.
An "agent's message" is a message transmitted by DTC to and received by the exchange agent and forming part of the book-entry confirmation, stating that:
- DTC has received an express acknowledgment from a participant in DTC's automated tender offer program that is tendering old notes that are the subject of such book-entry confirmation;
- the participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agent's message relating to guaranteed delivery, the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and
- we may enforce the agreement against the participant.
HOW TO TENDER IF YOU ARE A BENEFICIAL OWNER
If you beneficially own old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those notes, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either:
- make appropriate arrangements to register ownership of the old notes in your name; or
- obtain a properly completed bond power from the registered holder of your old notes.
The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.
SIGNATURES AND SIGNATURE GUARANTEES
You must have signatures on a letter of transmittal or a notice of withdrawal described below guaranteed by an "eligible institution" unless the old notes are tendered:
- by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal and the new notes are being issued directly to the registered holder of the old notes tendered in the exchange offer for those new notes; or
- for the account of an eligible institution.
An "eligible institution" is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act, in each case that is a member of one of the recognized signature guarantee programs identified in the letter of transmittal.
WHEN ENDORSEMENTS OR BOND POWERS ARE NEEDED
If a person other than the registered holder of any old notes signs the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power. The registered holder must sign the bond power as the registered holder's name appears on the old notes. An eligible institution must guarantee that signature.
If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this requirement, they also must submit evidence satisfactory to us of their authority to deliver the letter of transmittal.
DETERMINATIONS UNDER THE EXCHANGE OFFER
We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered old notes and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes our acceptance of which, in the opinion of our counsel, might be unlawful. We also reserve the right to waive any defects, irregularities or conditions of the exchange offer as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within the time we determine. Neither we, the exchange agent nor any other person will be under any duty to give notification of defects or irregularities with respect to tenders of old notes, nor will we or those persons incur any liability for failure to give such notification. Tenders of old notes will not be deemed made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.
WHEN WE WILL ISSUE NEW NOTES
In all cases, we will issue new notes for old notes that we have accepted for exchange in the exchange offer only after the exchange agent timely receives:
- old notes or a timely book-entry confirmation of such old notes into the exchange agent's account at DTC; and
- a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.
RETURN OF OLD NOTES NOT ACCEPTED OR EXCHANGED
If we do not accept any tendered old notes for exchange for any reason described in the terms and conditions of the exchange offer or if old notes are submitted for a greater principal amount than the holder desires to exchange, we will return the unaccepted or non-exchanged old notes without expense to their tendering holder. In the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, such non-exchanged old notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the rejection of tender or the expiration or termination of the exchange offer.
YOUR REPRESENTATIONS TO US
By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
- any new notes that you receive will be acquired in the ordinary course of your business;
- you have no arrangement or understanding with any person to participate in the distribution of the old notes or the new notes;
- you are not our "affiliate," as defined in Rule 405 of the Securities Act, or, if you are our affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
- if you are not a broker-dealer, you are not engaged in, and do not intend to engage in, the distribution of the new notes;
- if you are a broker-dealer, you will receive new notes for your own account in exchange for old notes that you acquired as a result of market-making activities or other trading activities, and you will deliver a prospectus in connection with any resale of such new notes;
- if you are a broker-dealer, you did not purchase the old notes to be exchanged for the new notes from us; and
- you are not acting on behalf of any person who could not truthfully and completely make the foregoing representations.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old notes but they are not immediately available or if you cannot deliver your old notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTC's automated tender offer program prior to the expiration date, you may tender if:
- the tender is made through an eligible institution;
- prior to the expiration date, the exchange agent receives from that eligible institution either a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail or hand delivery or a properly transmitted agent's message relating to a notice of guaranteed delivery:
- stating your name and address, the registration number or numbers of your old notes and the principal amount of old notes tendered;
- stating that the tender is being made thereby; and
- guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal or facsimile thereof or agent's message in lieu thereof, together with the old notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and
- the exchange agent receives such properly completed and executed letter of transmittal or facsimile or agent's message, as well as all tendered old notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, the exchange agent will send a notice of guaranteed delivery to you if you wish to tender your old notes according to the guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date.
For a withdrawal to be effective:
- the exchange agent must receive a written notice of withdrawal at the address listed above under "Prospectus Summary -- The Exchange Agent"; or
- the withdrawing holder must comply with the appropriate procedures of DTC's automated tender offer program.
Any notice of withdrawal must:
- specify the name of the person who tendered the old notes to be withdrawn;
- identify the old notes to be withdrawn, including the registration number or numbers and the principal amount of such old notes;
- be signed by the person who tendered the old notes in the same manner as the original signature on the letter of transmittal used to deposit those old notes, or be accompanied by documents of transfer sufficient to permit the trustee to register the transfer into the name of the person withdrawing the tender; and
- specify the name in which such old notes are to be registered, if different from that of the person who tendered the old notes.
If old notes have been tendered under the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of DTC.
We will determine in our sole discretion all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal, and our determination will be final and binding on all parties. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.
Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, such old notes will be credited to an account maintained with DTC for the old notes. This return or crediting will take place as soon as practicable after withdrawal. You may retender properly withdrawn old notes by following one of the procedures described under " -- Procedures for Tendering" above at any time on or prior to the expiration date.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by facsimile, email, telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the old notes and in handling or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the exchange offer. They include:
- SEC registration fees;
- fees and expenses of the exchange agent and trustee;
- accounting and legal fees and printing costs; and
- related fees and expenses.
TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of old notes in the exchange offer. The tendering holder will, however, be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:
- certificates representing new notes or old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of old notes tendered;
- tendered old notes are registered in the name of any person other than the person signing the letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of old notes in the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a tendering holder is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to that tendering holder. The exchange agent will retain possession of new notes with a face amount equal to the amount of the transfer taxes due until it receives payment of the taxes.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not tender your old notes for new notes in the exchange offer, or if you tender your old notes but subsequently withdraw them, your old notes will remain outstanding and continue to accrue interest, but will not retain any rights under the registration rights agreement (except in limited circumstances involving the initial purchasers and specified broker-dealers) or accrue additional interest under that agreement. IN ADDITION, YOU WILL REMAIN SUBJECT TO THE EXISTING RESTRICTIONS ON TRANSFER OF THE OLD NOTES. IN GENERAL, YOU MAY NOT OFFER OR SELL THE OLD NOTES UNLESS EITHER THEY ARE REGISTERED UNDER THE SECURITIES ACT OR THE OFFER OR SALE IS EXEMPT FROM OR NOT SUBJECT TO REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. Except as required by the registration rights agreement, we do not intend to register resales of the old notes under the Securities Act.
THE TENDER OF OLD NOTES IN THE EXCHANGE OFFER WILL REDUCE THE PRINCIPAL AMOUNT OF THE OLD NOTES OUTSTANDING. DUE TO THE CORRESPONDING REDUCTION IN LIQUIDITY, THIS MAY HAVE AN ADVERSE EFFECT UPON, AND INCREASE THE VOLATILITY OF, THE MARKET PRICE OF ANY OLD NOTES THAT YOU CONTINUE TO HOLD FOLLOWING COMPLETION OF THE EXCHANGE OFFER.
ACCOUNTING TREATMENT
We will not recognize a gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize our expenses of the exchange offer over the term of the new notes in accordance with U.S. generally accepted accounting principles.
OTHER
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your decision on what action to take. In the future, we may seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any old notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered old notes, except as required by the registration rights agreement.
DESCRIPTION OF NOTES
We will issue the new notes, and we issued the old notes, under an indenture, dated as of July 1, 2004, between Pride International, Inc., as issuer, and JPMorgan Chase Bank, as trustee, as supplemented by the First Supplemental Indenture thereto dated as of July 7, 2004. In this prospectus, we sometimes refer to the Indenture and the First Supplemental Indenture as the "indenture." In connection with the issuance of the old notes, we also entered into a registration rights agreement with the initial purchasers of the old notes. This description is a summary of the material provisions of the notes, the indenture and the registration rights agreement. It does not purport to be complete. We urge you to read the notes, the indenture and the registration rights agreement in their entirety because those documents, and not this description, define your rights as holders of the notes.
We have filed the indenture and the registration rights agreement as exhibits to the registration statement of which this prospectus is a part. The terms of the indenture include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939. Debt securities may be issued under the indenture from time to time in separate series, each up to the aggregate amount authorized for each series, and the notes are the initial series of debt securities to be issued under the indenture.
The old notes and the new notes issued in the exchange offer will together constitute a single class of securities under the indenture. If the exchange offer for notes is consummated, holders of old notes who do not exchange their old notes for new notes in the exchange offer will vote together with holders of new notes for all relevant purposes under the indenture. Accordingly, in determining whether the required holders have given any notice, consent or waiver or taken any other action permitted under the indenture, any old notes that remain outstanding after the exchange offer will be aggregated with the new notes, and the holders of those old notes and new notes will vote together as a single class.
As used in this "Description of Notes" section, references to "Pride," "we," "our" or "us" refer solely to Pride International, Inc. and not to its subsidiaries. In addition, we have used in this description capitalized and other terms that we have defined below under " -- Glossary" and in other parts of this description.
GENERAL
The notes are limited initially to $500 million aggregate principal amount and are senior unsecured obligations of Pride. We may issue additional notes from time to time without the consent of holders. Any issuance of additional notes is subject to the covenant described below under the caption " -- Restrictive Covenants -- Limitation on Indebtedness," if in effect at the time of such issuance. The notes and any additional notes subsequently issued under the indenture will be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. We will issue notes in denominations of $1,000 and integral multiples of $1,000. The notes will mature on July 15, 2014.
Interest on the notes will accrue at the rate of 7 3/8% per annum from July 7, 2004 or, if interest has already been paid, from the date it was most recently paid. We will pay interest on January 15 and July 15 of each year, beginning January 15, 2005, to holders of record at the close of business on January 1 or July 1, as the case may be, immediately preceding the interest payment date. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months.
We will maintain an office or agency in The City of New York where notes may be presented for payment, which will initially be the office of the trustee at 4 New York Plaza, 15th Floor, New York, New York 10004. We will make payments on the notes either:
- by check mailed to your address as it appears in the note register, provided that, if you are a holder with an aggregate principal amount in excess of $2.0 million, you will be paid, if you so elect in writing, according to the immediately following bullet point; or
- by wire transfer of immediately available funds to an account maintained by you in the United States.
Payments on notes registered in the name of The Depository Trust Company, New York, New York, which we refer to as DTC, will be made according to the second bullet point above to the account of DTC or its nominee in the United States.
The registered holder of a note will be treated as its owner for all purposes, and all references in this description to "holders" mean holders of record, unless otherwise indicated.
RANKING
The notes will constitute our senior unsecured indebtedness and will rank equally in right of payment with all of our other unsubordinated indebtedness and senior in right of payment to all of our subordinated indebtedness. The notes will be effectively subordinated to our secured indebtedness with respect to the assets securing that indebtedness.
We currently conduct our operations through both U.S. and foreign subsidiaries, and our operating income and cash flow are generated by our subsidiaries. As a result, cash we obtain from our subsidiaries is the principal source of funds necessary to meet our debt service obligations. Contractual provisions or laws, as well as our subsidiaries' financial condition and operating requirements, may limit our ability to obtain cash from our subsidiaries that we require to pay our debt service obligations, including payments on the notes. In addition, holders of the notes will have a junior position to the claims of creditors, including trade creditors and tort claimants, of our subsidiaries that do not guarantee the notes and to all secured creditors of our subsidiaries that guarantee the notes with respect to the assets securing the claims of those secured creditors.
We and our subsidiaries are subject to some restrictions in the notes on incurring indebtedness, though any indebtedness that we or our subsidiaries may incur could still be substantial. As of June 30, 2004, as adjusted for the issuance of the old notes, completion of our new revolving credit facility and term loan on the same date as the issuance of the old notes and the use of the net proceeds from these transactions, including borrowings of $147.4 million under the revolving credit facility, to repay debt as described under "Private Placement," we would have had outstanding $1.1 billion of unsecured and unsubordinated indebtedness, no secured debt and $1.1 million of subordinated indebtedness (in each case excluding guarantees of indebtedness of our subsidiaries), and our subsidiaries would have had outstanding $2.2 million of unsecured and unsubordinated indebtedness, $1.0 billion of secured indebtedness and no subordinated indebtedness, in each case excluding intercompany indebtedness.
TERMINATION OF COVENANTS UPON ACHIEVEMENT OF INVESTMENT GRADE STATUS
If at any time the notes achieve an Investment Grade Status and no Event of Default has occurred and is then continuing, which occurrence we call an "Investment Grade Status Event," then certain covenants described below under " -- Restrictive Covenants," together with clause (3) of the covenant described below under " -- Consolidation, Merger and Sale of Assets," will terminate and thereafter will no longer apply to us and our Subsidiaries. See " -- Restrictive Covenants."
SUBSIDIARY GUARANTEES OF NOTES
Under the circumstances described below, our payment obligations under the notes may in the future be jointly and severally guaranteed by our existing or future Subsidiaries as subsidiary guarantors. Although there currently are no subsidiary guarantors, covenants described below may require a Subsidiary in the future to guarantee the notes simultaneously with its guarantee of our other Indebtedness (except Indebtedness under a Credit Facility). See " -- Restrictive Covenants -- Limitation on Non-Guarantor Subsidiaries."
Under its subsidiary guarantee, each subsidiary guarantor will guarantee, jointly and severally, to each holder and the trustee, the full and prompt performance of our obligations under the indenture and the notes, including the payment of principal of (or premium, if any, on) and interest, if any, on the notes.
The subsidiary guarantees will be unsecured senior obligations of each subsidiary guarantor and will:
- rank equally in right of payment with all other unsubordinated indebtedness of that subsidiary guarantor,
- rank senior in right of payment to all subordinated indebtedness of that subsidiary guarantor, and
- be effectively subordinated to all secured indebtedness of the subsidiary guarantor with respect to the assets securing that indebtedness.
The obligations of each subsidiary guarantor will be limited to the maximum amount that will not render that subsidiary guarantor insolvent or leave it with unreasonably small capital under federal or state law, after giving effect to the following:
- all other indebtedness of that subsidiary guarantor,
- the right of the subsidiary guarantor to contribution from other subsidiary guarantors, and
- any other rights the subsidiary guarantor may have.
Each subsidiary guarantor that makes a payment or distribution under a subsidiary guarantee will 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.
Each subsidiary guarantor may consolidate with or merge with or into or sell or otherwise dispose of all or substantially all of its assets to us or another subsidiary guarantor without limitation, except to the extent any transaction is subject to the covenants described below under " -- Restrictive Covenants" or the "Consolidation, Merger and Sale of Assets" covenant described below. Each subsidiary guarantor may consolidate with or merge with or into another entity (whether or not affiliated with the subsidiary guarantor) only if:
- the surviving entity, if not the subsidiary guarantor, agrees to assume the subsidiary guarantor's subsidiary guarantee and all its other obligations under the indenture, except to the extent the subsidiary guarantee and such obligations are released as described below, and
- the transaction does not result in a Default or Event of Default that is continuing.
A subsidiary guarantor will be released from its subsidiary guarantee and all of its other obligations under the indenture upon:
- the sale or other disposition, by merger or otherwise, of the subsidiary guarantor or all or substantially all of its assets to a person other than us or another Subsidiary and in a transaction that is otherwise in compliance with the indenture,
- the release of all guarantees by the subsidiary guarantor of our other Indebtedness (except our Indebtedness under any Credit Facility), or
- the designation of the subsidiary guarantor as a Non-Recourse Subsidiary.
Any release pursuant to the first bullet point above will occur, however, only to the extent that all obligations of the subsidiary guarantor under all of its guarantees of our other Indebtedness also terminate or are released upon the sale or other disposition.
OPTIONAL REDEMPTION
At any time prior to July 15, 2007, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes issued under the indenture at a redemption price of 107.375% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders on a record date to receive interest due on the relevant interest payment date), with the net cash proceeds of one or more Equity Offerings, provided that:
- at least 65% of the aggregate principal amount of notes issued under the indenture remains outstanding immediately after the occurrence of such redemption (excluding notes held by Pride and its Subsidiaries); and
- the redemption occurs within 180 days of the date of the closing of such Equity Offering.
On and after July 15, 2009, we may redeem all or a part of the notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date (subject to the right of holders on a record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
YEAR PERCENTAGE
---------------------- ----------
2009.................. 103.688%
2010.................. 102.458%
2011.................. 101.229%
2012 and thereafter... 100.000%
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In addition, we may redeem all or a part of the notes, at any time prior to July 15, 2009, at a redemption price equal to the greater of:
- 100% of the principal amount of the notes to be redeemed plus accrued but unpaid interest to the date of redemption; and
- (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the date of redemption to July 15, 2009 (except for currently accrued but unpaid interest) (assuming the notes are redeemed, and based on the applicable redemption price, on that date) discounted to the date of redemption, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the Treasury Rate, plus 50 basis points, plus (b) accrued but unpaid interest to the date of redemption (subject to the right of holders on a record date to receive interest due on the relevant interest payment date).
The actual redemption price, calculated as provided in this paragraph, will be calculated and certified to the trustee and us by the Independent Investment Banker. For purposes of determining the optional redemption price pursuant to this paragraph, the following definitions are applicable:
"Comparable Treasury Issue" means the United States Treasury security or securities selected by the Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the notes to July 15, 2009 that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity.
"Comparable Treasury Price" means, for any redemption date, (1) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means Citigroup Global Markets Inc. and any successor firm, or if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the trustee after consultation with us.
"Reference Treasury Dealer" means each of Citigroup Global Markets Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and their respective successors, plus two other dealers selected by the Independent Investment Banker that are primary U.S. government securities dealers in New York City; provided, if any of Citigroup Global Markets Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. or any primary U.S. government securities dealer selected by the Independent Investment Banker shall cease to be a primary U.S. government securities dealer, then such other primary U.S. government securities dealers as may be substituted by the Independent Investment Banker.
"Reference Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) at 3:30 p.m., New York City time, on the third business day preceding such redemption date, as quoted in writing to the trustee by such Reference Treasury Dealer.
"Treasury Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week in which the calculation date falls (or in the immediately preceding week if the calculation date falls on any day prior to the usual publication date for such release) or does not contain such yields, the rate per year equal to the semi- annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate shall be calculated on the third business day preceding the redemption date. Any weekly average yields calculated by interpolation or extrapolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded upward.
We are required to give notice of redemption by mail to holders not more than 60 but not less than 30 days prior to the redemption date. If we specify that less than all of the outstanding notes are to be redeemed, the trustee will select the notes to be redeemed in principal amounts of $1,000 or integral multiples of $1,000 either pro rata, by lot or by such other method the trustee considers appropriate in accordance with industry standards at the time of the redemption.
REPURCHASE AT OPTION OF THE HOLDER UPON A CHANGE IN CONTROL
In the event of any Change in Control of Pride resulting in a Rating Decline, each holder of notes will have the right, at the holder's option, subject to the terms and conditions of the indenture, to require us to purchase all or any portion (provided that the principal amount must be $1,000 or an integral multiple thereof) of the holder's notes as of the date that is 35 business days after the occurrence of such Change in Control, which we refer to as the "Change in Control Purchase Date," at a cash price equal to 101% of the outstanding principal amount of those notes plus accrued and unpaid interest, if any, through and including the Change in Control Purchase Date (subject to the right of holders on a record date to receive interest due on the relevant interest payment date), which we refer to as the "Change in Control Purchase Price."
Within 15 business days after the Change in Control resulting in a Rating Decline, Pride will mail to the trustee and to each holder (and to beneficial owners if required by applicable law) a notice regarding such Change in Control, which notice will state, among other things:
- the date of such Change in Control and, briefly, the events causing such Change in Control,
- the date by which the Change in Control Purchase Notice must be given,
- the Change in Control Purchase Date,
- the Change in Control Purchase Price,
- the name and address of the paying agent,
- the procedures that holders must follow to exercise their rights, and
- the procedures for withdrawing a Change in Control Purchase Notice.
To exercise the purchase right, the holder must deliver written notice of the exercise of such right, which we refer to as a "Change in Control Purchase Notice," to the paying agent prior to the close of business on the Change in Control Purchase Date. The Change in Control Purchase Notice must state:
- the certificate number of any note in certificated form to be delivered by the holder thereof for purchase by Pride,
- the portion of the principal amount of notes to be purchased, which portion must be $1,000 or an integral multiple thereof, and
- that such notes are to be purchased by Pride pursuant to the applicable provisions of the notes.
Any Change in Control Purchase Notice may be withdrawn by the holder by a written notice of withdrawal delivered to the paying agent prior to the close of business on the Change in Control Purchase Date. The notice of withdrawal must state the principal amount and the certificate numbers of the notes as to which the withdrawal notice relates and the principal amount, if any, which remains subject to a Change in Control Purchase Notice.
Payment of the Change in Control Purchase Price for a note for which a Change in Control Purchase Notice has been delivered and not validly withdrawn is conditioned upon delivery of such note (together with necessary endorsements) to the paying agent at any time (whether prior to, on or after the Change in Control Purchase Date) after the delivery of such Change in Control Purchase Notice. Payment of the Change in Control Purchase Price for such note will be made promptly following the later of the business day following the Change in Control Purchase Date or the time of delivery of such note. If the paying agent holds, in accordance with the terms of the indenture, money sufficient to pay the Change in Control Purchase Price of such note on the business day following the Change in Control Purchase Date, then, after the Change in Control Purchase Date, such note will cease to be outstanding, interest on such note will cease to accrue and will be deemed paid and all other rights of the holder will terminate (other than the right to receive the Change in Control Purchase Price upon delivery of such note), whether or not such note is delivered to the paying agent.
One of the events that constitutes a Change in Control under the indenture is a sale, conveyance, transfer or lease of all or substantially all of the assets of Pride and its Subsidiaries, taken as a whole. New York law will govern the indenture and the notes, and there is no established quantitative definition under New York law of "substantially all" of the assets of a corporation. Accordingly, if we engaged in a transaction in which we disposed of less than all of our assets, a question of interpretation could arise as to whether that disposition was of "substantially all" of our assets and whether we were required to purchase notes at the option of the holders.
We will comply with the provisions of the Exchange Act that may then be applicable to our offer to purchase notes at the option of the holders thereof upon a Change in Control and, if required, will file a Schedule TO or any other required schedule.
The Change in Control purchase feature of the notes may, in certain circumstances, make more difficult or discourage a takeover of Pride and, thus, the removal of incumbent management. The Change in Control purchase feature, however, is not the result of management's knowledge of any specific effort to accumulate shares of common stock or to obtain control of Pride by means of a merger, tender offer, solicitation or otherwise, or part of a plan by management to adopt a series of anti-takeover provisions. The terms of such feature result from negotiations between Pride and the initial purchasers of the old notes.
The provisions of the indenture relating to a Change in Control may not afford the holders protection in the event of a highly leveraged transaction, reorganization, restructuring, merger, spin-off or similar transaction that may adversely affect holders, if such transaction does not constitute a Change in Control.
We are required to offer to repurchase the notes only in the event that a Change in Control results in a Rating Decline. Change in control provisions of other outstanding debt may require only that a change in control occurs. Accordingly, if a Change in Control were to occur that does not result in a Rating Decline, we could be required to repurchase other outstanding debt but would not be required to offer to repurchase the notes. If a Change in Control were to occur, there can be no assurance that we would have funds sufficient to pay the Change in Control Purchase Price for all of the notes that might be delivered by holders seeking to exercise the purchase right. In addition, our ability to purchase notes with cash may be limited by the terms of our then-existing borrowing agreements.
RESTRICTIVE COVENANTS
The covenants described in this section of the prospectus will terminate upon the occurrence of an Investment Grade Status Event, except for the covenants described under the captions " -- Limitation on Sale and Lease-Back Transactions," " -- Limitation on Liens," " -- Limitation on Non-Guarantor Subsidiaries" and " -- Reports." See " -- Termination of Covenants Upon Achievement of Investment Grade Status." In addition, upon the occurrence of an Investment Grade Status Event, clause (3) of the covenant described under " -- Consolidation, Merger and Sale of Assets" will also terminate.
The indenture will contain, among others, the following covenants:
Transactions with Affiliates. We will, and will permit any Subsidiary to, conduct any business or enter into any transaction or series of related transactions, including 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 of our Affiliates (other than transactions among Pride and any of its Wholly Owned Subsidiaries or among its Wholly Owned Subsidiaries) only if:
(1) the transaction or series of related transactions is on terms which are no less favorable in all material respects to us or the Subsidiary than those that could be obtained in a comparable arm's length transaction with a person that is not such an Affiliate, and
(2) if the transaction or series of related transactions has a Fair Market Value:
- in excess of $10 million per year but less than $25 million per year, we certify to the trustee that the transaction or series of related transactions complies with clause (1) above, or
- in excess of $25 million per year, then:
(a) the transaction or series of related transactions is approved by a majority of our Board of Directors, including a majority of the disinterested directors, which approval is evidenced by a board resolution that the transaction or series of related transactions complies with clause (1) above, or
(b) we receive a favorable opinion from a nationally recognized investment banking or similar firm of our choice (having expertise in the specific area which is the subject of the opinion) that the payments to be made are fair consideration for the transaction or series of related transactions.
These provisions will not apply to the following:
- sales by Pride of its common stock to any of its Affiliates,
- reasonable compensation (including amounts paid pursuant to employee benefit plans) and indemnification paid or made available to an officer, director or employee of Pride or a Subsidiary for services rendered in that person's capacity as an officer, director or employee, or
- the making of any Restricted Payment otherwise permitted by the indenture.
Limitation on Restricted Payments. We will, and will permit any Subsidiary to, make any Restricted Payment only if, at the time of and after giving effect to the proposed Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would result from the Restricted Payment,
(2) we could incur at least $1.00 of additional Indebtedness under the Consolidated Interest Coverage Ratio test described in the first sentence under the caption " -- Limitation on Indebtedness," and
(3) the aggregate 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 1999 Issue Date by us or any Subsidiary does not exceed the sum of:
- 50% of our aggregate Consolidated Net Income accrued during the period beginning on April 1, 1999 and ending on the last day of the fiscal quarter ending immediately prior to the date of such proposed Restricted Payment (or if such Consolidated Net Income is a deficit, minus 100% of the deficit), plus
- an amount equal to (a) the aggregate net cash proceeds and the
Fair Market Value of securities or other Property other than
cash we have received, after the 1999 Issue Date, from the
issuance or sale (other than to a Subsidiary or an employee
stock ownership plan or trust established by us for the
benefit of our employees) of shares of our Capital Stock,
excluding Redeemable Stock but including the Capital Stock
issued upon the exercise of options, warrants or rights to
purchase our Capital Stock (other than Redeemable Stock) and
(b) the liability (expressed as a positive number) in
accordance with GAAP for any of our Indebtedness or carrying
value of Redeemable Stock that has been issued after the 1999
Issue Date and converted into, exchanged for or satisfied by
the issuance of shares of our Capital Stock (other than
Redeemable Stock) after the 1999 Issue Date, plus
- to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Non-Recourse Subsidiaries or joint ventures or other persons resulting from dividends, repayments of loans or advances, releases or discharges of guarantees or other obligations or other transfers of Property or return of capital, in each case to or in favor of us or a Subsidiary after the 1999 Issue Date from any Non-Recourse Subsidiary or joint venture or other person 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 or other person, the total amount of Investments (other than Permitted Investments permitted by clauses (1)-(10) of the definition of "Permitted Investments") in such Non-Recourse Subsidiary or joint venture or other person made by us and our Subsidiaries in such Non-Recourse Subsidiary or joint venture or other person existing on or made after the 1999 Issue Date, plus
- to the extent not otherwise included in our Consolidated Net Income or in the previous bullet point, the total amount of Investments existing on or made after the 1999 Issue Date in persons which have become Subsidiaries subsequent to the 1999 Issue Date (calculated as of the date they become Subsidiaries), plus
- $50 million.
These provisions will not prevent:
(A) the payment of any dividend on the Capital Stock of any class within 60 days after the date of its declaration if at the date of declaration the payment would be permitted by the indenture, provided that at the time of the declaration of such dividend, no Default shall have occurred and be continuing,
(B) any repurchase or redemption of our Capital Stock or Subordinated Indebtedness made by exchange for our Capital Stock (other than Redeemable Stock), or out of the net cash proceeds from the substantially concurrent issuance or sale (other than to a Subsidiary) of our Capital Stock (other than Redeemable Stock), if the net cash proceeds from the sale are excluded from computations under the second bullet point under (3) 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 solely in exchange for, or out of the net cash proceeds from the substantially concurrent sale of, new Subordinated Indebtedness, so long as the new Subordinated Indebtedness:
- is subordinated to the notes or the subsidiary guarantees, as the case may be, at least to the same extent as the Subordinated Indebtedness so exchanged, purchased or redeemed,
- has a stated maturity later than the stated maturity of the Subordinated Indebtedness so exchanged, purchased or redeemed, and
- has an Average Life at the time incurred that is greater than the remaining Average Life of the Subordinated Indebtedness so exchanged, purchased or redeemed.
Restricted Payments permitted to be made as described in (B) and (C) above will be excluded in calculating the amount of Restricted Payments thereafter; Restricted Payments made as described in (A) above will be included.
Limitation on Indebtedness. We will, and will permit any Subsidiary to, create, incur, assume, suffer to come into existence, guarantee or otherwise become liable with respect to the payment of (collectively, "incur") any Indebtedness only if, after giving effect to the incurrence of that Indebtedness, no Default or Event of Default would occur and the Consolidated Interest Coverage Ratio for the Determination Period preceding the applicable transaction date is at least 2.0 to 1.0. We or any Subsidiary may, however, incur Permitted Indebtedness. Any Indebtedness of a person existing at the time that person becomes a Subsidiary (or is consolidated or merged with or into a Subsidiary or Pride) will be deemed to be incurred at the time such person becomes a Subsidiary (or the merger or consolidation occurs).
Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries. We will not, and will not permit any Subsidiary to, 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 that by its terms restricts the ability of any Subsidiary to:
- pay dividends or make any other distributions on its Capital Stock to us or any Subsidiary,
- pay any Indebtedness owed to us or any Subsidiary,
- make loans or advances to us or any Subsidiary, or
- transfer any of its Property to us or any Subsidiary.
This restriction will not apply to any encumbrance or restriction contained in any agreement or instrument:
(1) existing on the Issue Date,
(2) relating to any Property acquired after the Issue Date, so long as the encumbrance or restriction relates only to the Property so acquired,
(3) relating to any Indebtedness of any person at the date on which the person was merged or consolidated with or into, or acquired by, Pride or a Subsidiary or became a Subsidiary (other than Indebtedness incurred as a result of, or in anticipation of, such transaction),
(4) effecting a renewal, extension, refinancing, refund, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) of Indebtedness issued under an agreement referred to in clauses (1) through (3) above, so long as the encumbrances and restrictions contained in any such renewal, extension, refinancing, refund, repurchase or replacement agreement, taken as a whole, are not materially more restrictive than the encumbrances and restrictions contained in the original agreement, as determined in good faith by the Board of Directors,
(5) constituting customary provisions restricting subletting or assignment of any lease of Pride or any Subsidiary or provisions in agreements that restrict the assignment of such agreement or any rights thereunder,
(6) constituting restrictions on the sale or other disposition of any Property securing Indebtedness as a result of a Permitted Lien on such Property,
(7) constituting any temporary encumbrance or restriction 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 assets of such Subsidiary, provided that such sale or disposition is otherwise permitted under the indenture,
(8) constituting customary restrictions on cash, other deposits or assets imposed by customers and other persons under contracts entered into in the ordinary course of business,
(9) constituting 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,
(10) relating to Limited Recourse Indebtedness,
(11) constituting a requirement that a certain amount of Indebtedness be maintained between a Subsidiary and Pride or another Subsidiary,
(12) constituting any encumbrance or restriction with respect to Property under an agreement that has been entered into for the sale or disposition of such Property, provided that such sale or disposition is otherwise permitted under the indenture,
(13) relating to a person existing at the time that person is merged or consolidated with or into, or acquired by, Pride or a Subsidiary or becomes a Subsidiary (and not entered into as a result of, or in anticipation of, such transaction),
(14) constituting any encumbrance or restriction with respect to Property under a charter, lease or other agreement that has been entered into in the ordinary course of business for the employment of such Property, or
(15) in the case of Subsidiaries that are not Wholly Owned Subsidiaries, constituting a shareholders or other similar agreement.
Limitation on Asset Sales. We will engage in, and will permit any Subsidiary to engage in, any Asset Sale only if:
(1) we or the Subsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale, except in the case of:
- an Asset Sale resulting from the requisition of title to, seizure or forfeiture of any Property or any actual or constructive total loss or an agreed or compromised total loss, or
- a Bargain Purchase Contract,
(2) the Fair Market Value of all forms of consideration other than Cash Proceeds, Liquid Securities, Replacement Assets and Investments permitted by the "Limitation on Restricted Payments" covenant received for all Asset Sales (excluding those described in the two bullet points in clause (1) above) since the Issue Date does not exceed in the aggregate 10% of our Consolidated Net Tangible Assets at the time of such Asset Sale (before giving effect thereto), and
(3) we certify to the trustee that such Asset Sale complies with clauses (1) and (2) above.
We or such Subsidiary, as the case may be, may apply the Net Available Proceeds from each Asset Sale:
- to the acquisition of one or more Replacement Assets, or
- to repurchase or repay Senior Debt (other than Indebtedness owed to us or our Affiliates) (with a permanent reduction of availability in the case of revolving credit borrowings).
Such acquisition or such repurchase or repayment is, however, required to be made within 365 days after the consummation of the relevant Asset Sale.
In addition to the items referred to in the definition of "Cash Proceeds" below, the following amounts will be deemed to be cash or cash equivalents for purposes of this provision:
- any of our liabilities or of any Subsidiary (as shown on our 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 Property, and
- any Indebtedness or other obligations received by us or any such Subsidiary from such transferee that are converted by us or such Subsidiary into cash (to the extent of the cash received) within 180 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 $50 million, we will, or at any time after receipt of Excess Proceeds, we may, at our option, make a pro rata offer to all holders of notes and other Indebtedness 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, which we refer to as 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 an offer price in cash equal to 100% of the outstanding principal amount thereof plus any accrued and unpaid interest through and including the purchase date (subject to the right of holders on a record date to receive interest due on the relevant interest payment date). Upon completion of any Asset Sale Offer, the amount of Excess Proceeds will be reset to zero, and we may use any remaining amount for general corporate purposes.
Within five business days after we are obligated to make an Asset Sale Offer, we will send a written notice to holders, accompanied by such information that we in good faith believe will enable holders to make an informed decision with respect to the Asset Sale Offer.
We will comply with any applicable tender offer rules, including any applicable requirements of Rule 14e-l under the Exchange Act, in the event that an Asset Sale Offer is required under the circumstances described above, and we will file Schedule TO or any other required schedule.
Limitation on Sale and Lease-Back Transactions. We will, and will permit any Subsidiary to, enter into, assume, guarantee or otherwise become liable with respect to any Sale and Lease-Back Transaction only if:
- the proceeds from the Sale and Lease-Back Transaction are at least equal to the Fair Market Value of the Property being transferred, and
- we or the Subsidiary would have been permitted to enter into the transaction under the covenants described under the captions " -- Limitation on Indebtedness" (prior to an Investment Grade Status Event only) and " -- Limitation on Liens" (in each case, if the Sale and Lease-Back Transaction is a Capital Lease Obligation).
This restriction does not apply to any Sale and Lease-Back Transaction if:
(1) the transaction is for a period, including renewal rights, not in excess of three years;
(2) the sale of the Property that is the subject of the Sale and Lease-Back Transaction is made within 270 days after its acquisition, construction or improvement;
(3) the transaction is between us and a Subsidiary or between Subsidiaries; or
(4) we or a Subsidiary, as the case may be, applies the Net Available Proceeds from the transaction to the acquisition of one or more Replacement Assets or to repurchase or repay Senior Debt (other than Indebtedness owed to us or our Affiliates) (with a permanent reduction of availability in the case of revolving credit borrowings), all in accordance with the covenant described under the caption "Limitation on Asset Sales" as if such covenant applied to the transaction.
Limitation on Liens. We will not, and will not permit any Subsidiary to, create, incur, assume or suffer to come into existence any Liens on or with respect to any Property of Pride or that Subsidiary or any interest in that Property or any income or profits from that Property to secure (a) any Indebtedness of Pride or a Subsidiary (if it is not also a guarantor of the notes), unless prior to, or contemporaneously therewith, the notes are equally and ratably secured, or (b) any Indebtedness of any subsidiary guarantor unless prior to, or contemporaneously therewith, the subsidiary guarantees of the notes are equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the notes or the subsidiary guarantees, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the notes or the subsidiary guarantees, as the case may be, with the same relative priority as such Indebtedness has with respect to the notes or the subsidiary guarantees. This restriction will not apply to Permitted Liens.
Limitation on Non-Guarantor Subsidiaries. We will permit any Subsidiary that is not a subsidiary guarantor to incur a guarantee of any of our Indebtedness (except Indebtedness under a Credit Facility) only if:
(1) both
- such Subsidiary simultaneously executes and delivers a supplemental indenture providing for a guarantee of the notes by such Subsidiary, and
- with respect to any guarantee of our Subordinated Indebtedness by a Subsidiary, any such guarantee will be subordinated to that Subsidiary's guarantee of the notes at least to the same extent as such Subordinated Indebtedness is subordinated to the notes,
(2) 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 us 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
(3) such Subsidiary delivers to the trustee an opinion of outside legal counsel to the effect that such supplemental indenture has been duly executed and authorized and that such subsidiary guarantee constitutes a valid, binding and enforceable obligation of the Subsidiary, except insofar as enforcement may be:
- limited by bankruptcy, insolvency or similar laws (including all laws relating to fraudulent transfers), and
- subject to general principles of equity.
This covenant will not, however, apply to any guarantee of any Subsidiary that:
- existed at the time such person became one of our Subsidiaries, and
- was not incurred in connection with, or in contemplation of, that person becoming one of our Subsidiaries.
A pledge of assets to secure any Indebtedness for which the pledgor is not otherwise liable will not be considered a guarantee.
Reports. So long as any notes are outstanding, we will:
- file with the SEC, so long as it accepts our filings and whether or not we are required to do so under the Exchange Act, the annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that we would be required to file if we were subject to Section 13 or 15 of the Exchange Act, in each case on or before the dates on which such reports would have been required to have been filed with the SEC if we had been subject to Section 13 or 15 of the Exchange Act; and
- file with the trustee (with exhibits) copies of such reports within 15 days after the date on which we file the reports with the SEC or the date on which we would be required to file the reports if we were so required or, if the SEC will not accept the filings, supply copies of the reports (including any exhibits) to any holder promptly upon written request.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We will consolidate with or merge into any other entity, or sell, lease, convey, assign, transfer or otherwise dispose of all or substantially all of our and our Subsidiaries' assets, taken as a whole, to any person, only if:
(1) either
- we are the continuing entity, or
- the resulting entity is organized under the laws of the United States of America 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, any other member of the European Union, or the Netherlands Antilles, and assumes by a supplemental indenture the due and punctual payments on the notes and the performance of our covenants and obligations under the indenture,
(2) immediately after giving effect to the transaction on a pro forma basis (including any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), no Default or Event of Default under the indenture has occurred and is continuing or would result from the transaction,
(3) immediately after giving effect to the transaction on a pro forma basis as if the transaction had occurred on the first day of the Determination Period, we or the resulting entity would:
- be permitted to incur $1.00 of additional Indebtedness under the Consolidated Interest Coverage Ratio test described in the first sentence under the caption " -- Restrictive Covenants -- Limitation on Indebtedness," or
- have a Consolidated Interest Coverage Ratio that is no less than such ratio for us immediately prior to the transaction, in which event we will be deemed to have complied with the test described in the first sentence under the caption " -- Restrictive Covenants -- Limitation on Indebtedness," and
(4) in the case of the second bullet point under clause (1) above, in the event that the resulting entity is organized in a jurisdiction other than the United States of America, any State thereof or the District of Columbia that is different from the jurisdiction in which the obligor on the notes was organized immediately before giving effect to the transaction:
- such resulting entity delivers to the trustee an opinion of counsel stating that (a) the obligations of the resulting entity under the indenture are enforceable under the laws of the new jurisdiction of its formation subject to customary exceptions and (b) 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,
- the resulting entity agrees in writing to submit to New York jurisdiction and appoints an agent for the service of process in New York, each under terms satisfactory to the trustee, and
- our board of directors or the comparable governing body of the resulting entity determines in good faith that such transaction will not adversely affect the interests of the holders of notes in any material respect and a board resolution to that effect is delivered to the trustee.
This covenant will not apply to any merger of another entity into Pride. In addition, the provision described in clause (3) above will not apply to any merger into, or consolidation with, or any disposition of all or substantially all of our and our Subsidiaries' assets taken as a whole to, Pride or any of its Wholly Owned Subsidiaries.
In connection with any consolidation, merger, asset transfer or other transaction subject to this restriction, we will deliver or cause to be delivered to the trustee an officers' certificate and an opinion of counsel, each stating that such consolidation, merger, asset transfer or transaction and the supplemental indenture in respect thereof comply with the provisions of the indenture and that all conditions precedent in the indenture relating to such transaction have been complied with.
Upon any transaction of the type described in and effected in accordance with this section, the resulting entity will succeed to and be substituted for and may exercise every right and power of Pride under the indenture and the notes with the same effect as if the resulting entity had been named as Pride in the indenture. In the case of any asset transfer or disposition other than a lease, when the resulting entity assumes all the obligations and covenants of Pride under the indenture and the notes, we will be relieved of all such obligations.
EVENTS OF DEFAULT
If an Event of Default occurs and is continuing, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes may declare the principal of and accrued and unpaid interest on the notes to be due and payable immediately, except that, in the case of an Event of Default specified in item (d) below, if the Event of Default affects more than one series of debt securities issued under the indenture, the trustee or the holders of at least 25% in aggregate outstanding principal amount of all series affected by the default (voting as one class) are required to make such declaration. In the case of certain events of bankruptcy or insolvency, the principal amount, together with all accrued and unpaid interest on the notes, will automatically become immediately due and payable without any action on the part of either the trustee or any holder. At any time after a declaration of acceleration has been made, the holders of a majority in aggregate principal amount of the outstanding notes or of all the outstanding debt securities issued under the indenture that are affected by the default, as applicable, may, under certain circumstances, rescind any such acceleration and its consequences. Interest will, to the extent permitted by law, accrue at the annual rate of 1% above the coupon rate and be payable on demand upon a default in the payment of principal amount, accrued and unpaid interest or any redemption price or Change in Control Purchase Price, and such interest will be compounded semiannually. The accrual of such interest on overdue amounts will be in lieu of, and not in addition to, the continued accrual of interest.
An Event of Default with respect to the notes includes any of the following:
(a) our failure to pay interest on any note for 30 days;
(b) our failure to pay principal of or any premium on any note when due, whether at stated maturity, upon redemption or repurchase or otherwise;
(c) our failure to comply with any of our covenants or agreements described in " -- Consolidation, Merger and Sale of Assets," " -- Restrictive Covenants -- Limitations on Asset Sales" and " -- Repurchase at Option of the Holder Upon a Change in Control";
(d) the failure in the performance or breach of any covenant or agreement by Pride contained in the notes or the indenture (other than a covenant or agreement a default in performance or breach of which is specifically dealt with) for 60 days after written notice has been mailed to Pride by the trustee or to Pride and the trustee by the holders of at least 25% of the aggregate principal amount of the outstanding notes (or, if the default affects more than one series of debt securities issued under the indenture, the holders of at least 25% in aggregate outstanding principal amount of all series so affected);
(e) the failure by Pride or any Subsidiary to pay its Indebtedness (other than Limited Recourse Indebtedness) when due within the applicable grace period or the acceleration of any such Indebtedness by the holders thereof and, in either case, the aggregate principal amount of the due and unpaid or accelerated Indebtedness exceeds $50 million;
(f) the entry by a court of competent jurisdiction of one or more judgments or orders against Pride or any Subsidiary in an uninsured or unindemnified aggregate amount in excess of $50 million that remain undischarged or unsatisfied for 60 consecutive days after the right to appeal them has expired;
(g) any subsidiary guarantee for any reason ceases to be, or is asserted by Pride 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); and
(h) events of bankruptcy, insolvency or reorganization involving Pride or any of its Significant Subsidiaries.
If a Default or Event of Default occurs, is continuing and is known to the trustee, the trustee will notify the holders of the notes within 90 days after it occurs. The trustee may withhold notice to the holders of the notes of any Default or Event of Default, except in any payment on the notes, if the trustee in good faith determines that withholding notice is in the interests of the holders of the notes.
A holder of a note may pursue any remedy under the indenture only if:
- the holder gives the trustee written notice of a continuing Event of Default with respect to the notes;
- the holders of at least 25% in principal amount of the outstanding notes make a written request to the trustee to pursue the remedy;
- the holders offer the trustee indemnity satisfactory to the trustee against any loss, liability or expense;
- the trustee does not comply with the request within 60 days after receipt of the request and offer of indemnity; and
- during that 60-day period, the holders of a majority in principal amount of the outstanding notes do not give the trustee a direction inconsistent with the request.
This provision does not, however, affect the right of a holder of any notes to sue for the enforcement of any overdue payment.
In most cases, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders unless those holders have offered to the trustee indemnity satisfactory to it. Subject to this provision for indemnification, the holders of a majority in principal amount of the outstanding notes generally may direct the time, method and place of:
- conducting any proceeding for any remedy available to the trustee; or
- exercising any trust or power conferred on the trustee relating to or arising under an Event of Default (other than an Event of Default described under clauses (d) and (h) above).
In other cases, a majority in principal amount of all outstanding debt securities issued under the indenture is required. If an Event of Default occurs and is continuing, the trustee will be required to use the degree of care and skill of a prudent person in the conduct of his own affairs.
The indenture will require us to furnish to the trustee annually a statement as to our performance of certain of our obligations under the indenture and as to any default in performance.
MODIFICATION AND WAIVER
We and the trustee may supplement or amend the indenture for purposes of the notes with the consent of the holders of at least a majority in principal amount of the notes then outstanding and of any other series of debt securities issued under the indenture that are affected by the supplement or amendment (voting as one class). Without the consent of each holder of an outstanding note, however, no modification may:
- reduce the amount of notes whose holders must consent to an amendment, supplement or waiver;
- reduce the rate of or change the time for payment of interest on the note;
- reduce the principal of the note or change its stated maturity;
- reduce any premium payable on the redemption of the note or change the time at which the note may or must be redeemed;
- make payments on the note payable in currency other than U.S. dollars;
- impair the holder's right to institute suit for the enforcement of any payment on or with respect to the note;
- make any change in the percentage of principal amount of notes necessary to waive compliance with certain provisions of the indenture or to make any change in the provision related to modification;
- waive a continuing Default or Event of Default regarding any payment on the note;
- subordinate in right of payment, or otherwise subordinate, the note or any subsidiary guarantee of the note to any other Indebtedness; or
- materially and adversely affect the right provided in the indenture to require us to repurchase the note upon a Change in Control.
We and the trustee may supplement or amend the indenture or waive any provision of the indenture without the consent of any holders of notes in certain circumstances, including:
- to cure any ambiguity, omission, defect or inconsistency;
- to provide for the assumption of our obligations under the indenture by a successor upon any merger, consolidation or asset transfer permitted under the indenture;
- to provide for uncertificated notes in addition to or in place of certificated notes or to provide for bearer notes;
- to provide any security for, any guarantees of or any additional obligors on the notes;
- to comply with any requirement to effect or maintain the qualification of the indenture under the Trust Indenture Act of 1939;
- to add covenants that would benefit the holders of the notes or to surrender any rights we have under the indenture;
- to add Events of Default with respect to the notes; and
- to make any change that does not adversely affect any outstanding notes in any material respect; provided, however, that any change to conform the indenture to the offering memorandum relating to the old notes will not be deemed to adversely affect the notes.
The holders of a majority in principal amount of the outstanding notes (or, in some cases, of all debt securities issued under the indenture that are affected, voting as one class) may waive any existing or past Default or Event of Default with respect to those notes (or debt securities). Those holders may not, however, waive any Default or Event of Default in any payment on any note or compliance with a provision that cannot be amended or supplemented without the consent of each holder affected.
DEFEASANCE AND DISCHARGE
The notes will be subject to legal defeasance, to covenant defeasance and to satisfaction and discharge, in each case at our option.
Defeasance. When we use the term defeasance, we mean discharge from some or all of our obligations under the indenture. If we deposit with the trustee any combination of money or U.S. Government Obligations sufficient to make payments on the notes on the dates those payments are due, then, at our option, either of the following will occur:
- we will be discharged from our obligations with respect to the notes ("legal defeasance"); or
- we will no longer have any obligation to comply with the covenants described in " -- Restrictive Covenants" and " -- Consolidation, Merger and Sale of Assets" and other specified covenants under the indenture, and the related Events of Default will no longer apply ("covenant defeasance").
If the notes are defeased, the holders of the notes will not be entitled to the benefits of the indenture, except for obligations to register the transfer or exchange of notes, replace stolen, lost or mutilated notes or maintain paying agencies and hold money for payment in trust. In the case of covenant defeasance, our obligation to pay principal, premium and interest on the notes will also survive.
We will be required to deliver to the trustee an opinion of counsel that the deposit and related defeasance would not cause the holders of the notes to recognize income, gain or loss for U.S. federal income tax purposes and that the holders would be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the deposit and related defeasance had not occurred. If we elect legal defeasance, that opinion of counsel must be based upon a ruling from the United States Internal Revenue Service or a change in law to that effect.
Under current United States federal income tax law, legal defeasance would likely be treated as a taxable exchange of notes to be defeased for interests in the defeasance trust. As a consequence, a United States holder would recognize gain or loss equal to the difference between the holder's cost or other tax basis for the notes and the value of the holder's interest in the defeasance trust, and thereafter would be required to include in income a share of the income, gain or loss of the defeasance trust. Under current United States federal income tax law, covenant defeasance would not be treated as a taxable exchange of such debt securities.
Satisfaction and Discharge. In addition, the indenture will cease to be of further effect with respect to the notes, subject to exceptions relating to compensation and indemnity of the trustee and repayment to us of excess money or U.S. Government Obligations, when:
- either
(a)all outstanding notes have been delivered to the trustee for cancellation; or
(b)all outstanding notes not delivered to the trustee for cancellation either:
- have become due and payable;
- will become due and payable at their stated maturity within one year; or
- are to be called for redemption within one year; and
- we have deposited with the trustee any combination of money or U.S. Government Obligations in trust sufficient to pay the entire indebtedness on the notes when due; and
- we have paid all other sums payable by us with respect to the notes.
REGISTRATION RIGHTS OF THE NOTEHOLDERS
In connection with the issuance of the old notes, we and the initial purchasers of the old notes entered into a registration rights agreement. This agreement provides for the filing of the registration statement of which this prospectus is a part and, when that registration statement is effective, our offer to the holders who are able to make certain representations the opportunity to exchange their old notes for new notes according to the exchange offer.
The registration rights agreement provides that, unless the exchange offer would not be permitted by applicable law or SEC policy, we will (1) use our reasonable best efforts to cause the registration statement relating to the exchange offer to be declared effective under the Securities Act within 180 days after the Issue Date; (2) commence the exchange offer promptly after the exchange offer registration statement has been declared effective; (3) use our reasonable best efforts to keep the exchange offer registration statement effective until the closing of the exchange offer; and (4) keep the exchange offer open for not less than 20 business days and use our reasonable best efforts to cause the exchange to be completed within 45 days after the SEC declares the exchange offer registration statement effective, or longer if required by applicable law.
The registration rights agreement also provides that we will:
- use our reasonable best efforts to make available, for up to 180 days after the consummation of the exchange offer, a prospectus for use in connection with any resale of the new notes received by broker-dealers in exchange for old notes acquired as a result of market-making activities or other trading activities, as described below under "Plan of Distribution"; and
- pay certain expenses incident to the exchange offer and indemnify specified holders of the new notes (including broker-dealers) against certain liabilities, including liabilities under the Securities Act.
A broker-dealer that delivers this prospectus to purchasers in connection with resales of new notes will be subject to civil liability provisions under the Securities Act in connection with those sales and will be bound by the applicable provisions of the registration rights agreement, including the indemnification obligations.
If (1) upon advice of our outside counsel, we determine we are not permitted to effect the exchange offer due to any change in applicable law or SEC policy, (2) for any other reason the exchange offer is not consummated within 225 days after the Issue Date, (3) any initial purchaser of the old notes requests before the date that is 90 days after consummation of the exchange offer with respect to old notes that are not eligible to be exchanged for new notes in the exchange offer and that are held by it following consummation of the exchange offer, (4) any holder (other than an initial purchaser or any of our affiliates) is not eligible to participate in the exchange offer because of any applicable law or interpretations thereof, or (5) in the case of any initial purchaser that participates in the exchange offer, such initial purchaser does not receive freely tradable new notes (as determined under the registration rights agreement) in exchange for old notes constituting any portion of an unsold allotment, we will file with the SEC a shelf registration statement to cover resales of the notes by the holders who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement. In the case of clause (2), we may terminate the shelf registration statement at any time, without penalty, if the exchange offer is consummated.
We will use our reasonable best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the SEC after the filing thereof. For each of the old notes surrendered according to the exchange offer, the holder who surrendered such note will receive an new note having a principal amount equal to that of the surrendered note. Interest on each new note will accrue from the last interest payment date on which interest was paid on the old note surrendered in exchange or, if no interest has been paid on such note, from the Issue Date.
If we are obligated to file the shelf registration statement, we will use our reasonable best efforts to file the shelf registration statement with the SEC on or before the later of 60 days after such filing obligation arises and 90 days after the Issue Date and to cause the shelf registration statement to be declared effective by the SEC no later than 90 days after the date on which we are required to file the shelf registration statement.
If (1) we fail to file any of the registration statements required by the
registration rights agreement on or before the date specified for such filing,
(2) any of the registration statements is not declared effective by the SEC on
or before the date specified for such effectiveness, (3) we fail to consummate
the exchange offer on or prior to the date specified for completion, or (4) any
registration statement required by the registration rights agreement is declared
effective but later ceases to be effective or usable in connection with its
intended purpose prior to specified times except during limited periods as a
result of the exercise by us of our right to suspend the use of such
registration statement and the related prospectus as set forth in the
registration rights agreement (each such event referred to in clauses (1)
through (4) immediately above, a "Registration Default"), then we will pay to
each affected holder of the notes additional interest that will accrue and be
payable semiannually on the notes (in addition to the stated interest on the
notes) from and including the date such Registration Default occurs to, but
excluding, the date on which the applicable registration statement is filed or
is declared effective, the exchange offer is consummated, or the applicable
registration statement is again declared effective or made usable. During the
time that additional interest is accruing, the rate of additional interest will
be 0.25% per annum during the first 90-day period and will increase by 0.25% per
annum for each subsequent 90-day period, but in no event will the rate exceed
1.00% per annum in the aggregate regardless of the number of Registration
Defaults. No additional interest will accrue if we timely file an exchange offer
registration statement but are unable to complete the exchange offer because of
a change in applicable law and we then proceed timely with the filing and
effectiveness of the shelf registration statement. If, after the cure of all
Registration Defaults then in effect, there is a subsequent Registration
Default, the rate of additional interest for such subsequent Registration
Default will initially be 0.25%, regardless of the additional interest rate in
effect with respect to any prior Registration Default at the time of the cure of
the Registration Default. We will not be required to pay additional interest for
more than one Registration Default at a time. In addition, a holder will not be
entitled to receive any additional interest on any notes if that holder was, at
the time of consummation of the exchange offer, eligible to exchange, but did
not validly tender, old notes for new notes in the exchange offer.
If you wish to exchange your old notes for new notes in the exchange offer, you will be required to make to us the representations described under "The Exchange Offer -- Procedures for Tendering -- Your Representations to Us."
In connection with any resales under a shelf registration statement, the holder will be required to be named as a selling securityholder in the prospectus, will be required to deliver the prospectus and will be subject to civil liabilities under the Securities Act. Holders also will be bound by applicable provisions of the registration rights agreement, including indemnification obligations. Upon the occurrence of events that would require an amendment or supplement to the prospectus, public resales will not be permitted under the shelf registration statement until the amendment or supplement is provided to holders.
This summary of the registration rights agreements does not include all of the information included in the registration rights agreements and may not include all the information that you would find important. The summary is subject to, and is qualified in its entirety by reference to, all provisions of the registration rights agreement, which we have filed as an exhibit to the registration statement of which this prospectus is a part.
GOVERNING LAW
The indenture and the notes are governed by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEE
We have appointed JPMorgan Chase Bank as the trustee under the indenture and as paying agent, security registrar and custodian for the notes. JPMorgan Chase Bank serves as trustee under indentures relating to approximately $1.0 billion of our senior notes as of June 30, 2004. JPMorgan Chase Bank and its affiliates may perform certain commercial banking services for us from time to time for which they receive customary fees.
The indenture contains certain limitations on the rights of the trustee, if it or any of its affiliates is then our creditor, to obtain payment of claims in certain cases or to realize on certain property received on any claim, as security or otherwise. The trustee and its affiliates are permitted to engage in other transactions with us. However, if the trustee acquires any conflicting interest and a Default occurs with respect to the notes, the trustee must eliminate such conflict or resign within 90 days after ascertaining that it has a conflicting interest, unless the Default has been cured, waived or otherwise eliminated within the 90-day period.
EXCHANGE, REGISTRATION AND TRANSFER
Notes will be exchangeable for other notes of the same total principal amount and the same terms but in different authorized denominations in accordance with the indenture. Holders may present notes for registration of transfer at the office of the security registrar. The security registrar will effect the transfer or exchange if its requirements and the requirements of the indenture are met. There will be no service charge for any registration of transfer or exchange of the notes. However, payment of any transfer tax or similar governmental charge payable for that registration may be required.
In the case of any redemption or repurchase, we will not be required to register the transfer or exchange of:
- any note during a period beginning 15 business days prior to the mailing of the relevant notice of redemption or repurchase and ending on the close of business on the day of mailing of such notice; or
- any note that has been selected for redemption in whole or in part, except the unredeemed portion of any note being redeemed in part.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth below, the new notes will be issued in registered, global form (the "Global Notes"). The Global Notes will be deposited upon issuance with the trustee as custodian for DTC, in New York, New York, and registered in the name of DTC's nominee, Cede & Co., in each case for credit to an account of a direct or indirect participant in DTC as described below. Beneficial interests in the Global Notes may be held through the Euroclear System ("Euroclear") and Clearstream Banking, S.A. ("Clearstream") (as indirect participants in DTC).
Except as set forth below, the Global Notes may be transferred, in whole but not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in registered certificated form ("Certificated Notes") except in the limited circumstances described below. See " -- Exchange of Global Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Certificated Notes.
Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
We expect that, pursuant to procedures established by DTC:
(1) upon deposit of the Global Notes, DTC will credit the accounts of Participants exchanging old notes for new notes with portions of the principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).
Investors in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. Euroclear and Clearstream may hold interests in the Global Notes on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./N.V., as operator of Euroclear, and Citibank, N.A., as operator of Clearstream. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems.
The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a person having beneficial interests in a Global Note to pledge such interests to persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF AN INTEREST IN THE GLOBAL NOTES WILL NOT HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF CERTIFICATED NOTES AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR "HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and premium, if any, and interest on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the indenture. Under the terms of the indenture, we and the trustee will treat the persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither we, the trustee nor any agent of ours or the trustee has or will have any responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
We expect that, under DTC's current practice, at the due date of any payment in respect of securities such as the notes, DTC will credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the notes as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or us. Neither we nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised us that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for Certificated Notes, and to distribute such notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. None of us, the trustee or any of our respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for Certificated Notes in minimum denominations of $1,000 and in integral multiples of $1,000, if:
(1) DTC (a) notifies us that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and in either event we fail to appoint a successor depositary within 90 days; or
(2) there has occurred and is continuing an Event of Default and DTC notifies the trustee of its decision to exchange the Global Note for Certificated Notes.
In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Neither we nor the trustee will be liable for any delay by the depositary or its nominee in identifying the holders of beneficial interests in the Global Notes, and each such person may conclusively rely on, and will be protected in relying on, instructions from the depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Certificated Notes to be issued).
SAME-DAY SETTLEMENT AND PAYMENT
We will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the account specified by the depositary. The notes represented by the Global Notes will trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. We expect that secondary trading in any Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.
If the principal of or any premium or interest on the notes is payable on a day that is a legal holiday, the payment will be made on the following business day.
Subject to the requirements of any applicable abandoned property laws, the trustee and paying agent will pay to us upon written request any money held by them for payments on the notes that remains unclaimed for two years after the date upon which that payment has become due. After payment to us, holders entitled to the money must look to us for payment. In that case, all liability of the trustee or paying agent with respect to that money will cease.
GLOSSARY
"Adjusted Net Assets" of a subsidiary guarantor at any date means the amount by which the Fair Value of the Properties of such subsidiary guarantor exceeds the total amount of liabilities, including contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under its subsidiary guarantee, of such subsidiary guarantor at such date.
"Affiliate" of any specified person means any other 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, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of that person, whether through the ownership of voting securities, by agreement or otherwise. Beneficial ownership of 10% or more of the Voting Stock of a person will, however, be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease or other disposition (including any disposition by means of a merger or consolidation) by us or any of our Subsidiaries to any person other than us or a Wholly Owned Subsidiary, in one transaction or a series of related transactions, of:
(1) 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
(2) any of our or our Subsidiaries' other Property other than:
(A) sales of drill-string components or obsolete or worn out equipment in the ordinary course of business or other assets that, in our reasonable judgment, are no longer used or useful in the conduct of our or our Subsidiaries' business,
(B) any drilling contract, charter (bareboat or otherwise) or other lease of Property entered into by us or any of our Subsidiaries in the ordinary course of business, other than any Bargain Purchase Contract,
(C) a Permitted Investment or Restricted Payment permitted under " -- Restrictive Covenants -- Limitation on Restricted Payments,"
(D) a Change in Control,
(E) a consolidation, merger or disposition of all or substantially all of our and our Subsidiaries' assets, taken as a whole, in compliance with the provisions of the indenture described in " -- Consolidation, Merger and Sale of Assets,"
(F) any trade or exchange by us or any of our Subsidiaries of one or more drilling rigs or other vessels or equipment for one or more other Replacement Assets owned or held by another person, if:
- the Fair Value of the Property traded or exchanged by us or such Subsidiary (including cash or cash equivalents to be delivered by us or such Subsidiary) is reasonably equivalent to the Fair Value of the asset (together with cash or cash equivalents to be received by us or such Subsidiary) acquired, as determined in good faith by the principal financial officer of Pride for Fair Values less than or equal to $25 million, in good faith by the Board of Directors of Pride for Fair Values greater than $25 million but less than or equal to $100 million and by written appraisal by a nationally (or industry) recognized investment banking firm or appraisal firm for Fair Values greater than $100 million, and
- such exchange is approved by a majority of our disinterested directors,
(G) transfers of the Pride Illinois, Pride Kentucky, Pride West Virginia and Pride Pennsylvania,
(H) Securitization Transactions and Sale and Lease-Back Transactions permitted under the "Limitation on Sale and Lease-Back Transactions" covenant, and
(I) any transaction or series of related transactions that, but for this clause (I), would be Asset Sales, if:
- we elect to designate such transaction or series of related transactions as not constituting an Asset Sale, and
- the aggregate Net Available Proceeds from such transaction or any such series of related transactions so designated do not exceed $10,000,000.
An Asset Sale also includes the requisition of title to, seizure of or forfeiture of any Property, or any actual or constructive total loss or an agreed or compromised total loss of any Property.
"Average Life" means, as of any date, the quotient obtained by dividing:
(1) the sum of the products of
- 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 the applicable debt security or preferred stock multiplied in each case by
- the amount of such principal payment by
(2) 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 the agreement during or at the end of its term for less than Fair Market Value of the Property at the time such right to acquire the Property is granted.
"Capital Lease Obligation" means, at any time as to any person with respect to any Property leased by that person as lessee, the amount of the liability with respect to the 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 " -- Restrictive Covenants -- Limitation on Liens," a Capital Lease Obligation shall be deemed secured by a Lien on the Property being leased.
"Capital Stock" in any entity means any and all shares, interests, partnership interests, participations or other equivalents in the equity interest (however designated) in such entity and any rights (other than debt securities convertible into an equity interest), warrants or options to acquire an equity interest in such entity.
"Cash Proceeds" means, with respect to any Asset Sale or Sale and Lease-Back Transaction by any person, the aggregate consideration received for such transaction 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 of Asset Sale), including payments for 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" are deemed to include noncash consideration received with respect to an Asset Sale to the extent that such noncash consideration consists of:
(1) publicly traded debt securities rated as "BBB-" or higher by S&P and "Baa3" or higher by Moody's, or
(2) other Indebtedness of a person if:
- 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
- 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, or
(3) the items described in clauses (1), (2), (3), (4) and (5) under the definition of "Permitted Investments."
"Change in Control" means:
(1) a determination by us that any person or group (as defined in
Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than a Parent
Holding Company has become the direct or indirect beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of our
Voting Stock;
(2) we are merged with or into or consolidated with another entity and, immediately after giving effect to the merger or consolidation, less than 50% of the outstanding Voting Stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by:
- our stockholders immediately prior to such merger or consolidation;
- if the record date has been set to determine our stockholders entitled to vote on such merger or consolidation, our stockholders as of such record date; or
- a Parent Holding Company;
(3) we, either individually or in conjunction with one or more Subsidiaries, sell, convey, transfer or lease, or the Subsidiaries sell, convey, transfer or lease, all or substantially all of our and our Subsidiaries' assets, taken as a whole (either in one transaction or a series of related transactions), including Capital Stock of the Subsidiaries, to any person or entity (other than a Wholly Owned Subsidiary of Pride or a Parent Holding Company);
(4) the liquidation or dissolution of our company; or
(5) the first day on which a majority of the individuals who constitute the Board of Directors are not Continuing Directors.
The term "common stock" means common stock, par value $.01 per share, of Pride as it exists on the Issue Date or any other Capital Stock of Pride into which such common stock shall be reclassified or changed.
"Consolidated Current Liabilities" of any entity means, as of any date, the total liabilities (including tax and other proper accruals) of such entity 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 entity and its subsidiaries (other than Non-Recourse Subsidiaries) or between subsidiaries (other than between a subsidiary that is not a Non-Recourse Subsidiary and 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 ratio of:
(1) our aggregate amount of EBITDA for the latest four fiscal quarters for which financial information is available immediately prior to the applicable transaction date (the "Determination Period") to
(2) our aggregate Consolidated Interest Expense that is anticipated to accrue during a period consisting of the fiscal quarter in which the transaction date occurs and the three subsequent fiscal quarters (based upon the pro forma amount and maturity of, and interest payments on, Indebtedness of ourselves and our consolidated Subsidiaries expected by us to be outstanding on the transaction date and reasonably anticipated by us 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 on floating interest rate obligations equal to the base interest rates on such obligations in effect as of the transaction date.
This calculation is subject to the following qualifications:
(1) if Pride or any of its consolidated Subsidiaries is a party to any Interest Swap Obligation that would have the effect of changing the interest rate on any Indebtedness of Pride or any of its consolidated Subsidiaries for such four-quarter period (or a portion thereof), the resulting rate will be used for such four-quarter period or portion thereof;
(2) any Consolidated Interest Expense of Pride with respect to Indebtedness incurred or retired by Pride or any of its Subsidiaries during the fiscal quarter in which the transaction date occurs will be calculated as if such Indebtedness were so incurred or retired on the first day of the fiscal quarter in which the transaction date occurs; and
(3) 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 will be calculated on a pro forma basis as if the transaction had occurred on the first day of the Determination Period, and if, during the same four fiscal quarters:
- Pride or any of its consolidated Subsidiaries have engaged in any Asset Sale, EBITDA for such period will 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 Property that is the subject of the 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
- Pride or any of its consolidated Subsidiaries 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) will be calculated on a pro forma basis as if such acquisition and related financing had occurred on the first day of the period.
"Consolidated Interest Expense" means, with respect to any person for any period, without duplication, the sum of:
(1) the aggregate amount of cash and noncash interest expense (including capitalized interest) of such person and its subsidiaries (other than Non-Recourse Subsidiaries) for such period as determined on a consolidated basis in accordance with GAAP for Indebtedness, including, without limitation:
- any amortization of debt discount;
- net costs associated with Interest Swap Obligations (including any amortization of discounts);
- the interest portion of any deferred payment obligation;
- all accrued interest; and
- 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 for Non-Recourse Indebtedness;
(2) 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;
(3) the portion of any rental obligation of such person or its subsidiaries (other than Non-Recourse Subsidiaries) for any Capital Lease Obligation allocable to interest expense in accordance with GAAP;
(4) 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
(5) to the extent any debt of any other person is guaranteed by such person or any of its subsidiaries (other than Non-Recourse Subsidiaries), 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.
We will exclude from the calculation of Consolidated Interest Expense, to the extent included above, amortization or writeoff of deferred financing costs of such person and its subsidiaries during such period and any charge related to 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 each case, we will calculate Consolidated Interest Expense 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. We will exclude from the calculation the following, without duplication:
(1) any net income of any Non-Recourse Subsidiary, except that Pride's or any Subsidiary's equity in the net income of such Non-Recourse Subsidiary for such period will 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 Pride or such Subsidiary as a dividend or other distribution;
(2) gains and losses from Asset Sales or reserves relating thereto;
(3) items classified as extraordinary (other than the tax benefit, if any, of the utilization of net operating loss carryforwards or alternative minimum tax credits) and expenses for early retirement of debt;
(4) in the case of any computation of Consolidated Net Income for purposes of determining compliance with the covenant described under the caption " -- Restrictive Covenants -- Limitation on Restricted Payments," 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;
(5) any gain or loss, net of taxes, realized on the termination of any employee pension benefit plan;
(6) 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 during such period by such subsidiary to such person;
(7) the cumulative effect of changes in accounting principles; and
(8) 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 (without duplication of deductions) all Consolidated Current Liabilities of such person at such date.
"Consolidated Tangible Assets" of any person means, as of any date, the consolidated assets of such person and its subsidiaries (other than Non-Recourse Subsidiaries) at such date, after eliminating intercompany items between such person and its subsidiaries (other than Non-Recourse Subsidiaries) or between subsidiaries (other than between a subsidiary that is not a Non-Recourse Subsidiary and Non-Recourse Subsidiaries) and after deducting from such total:
(1) 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
(2) 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 is a member of the Board of Directors of Pride and either:
(1) who was a member of the Board of Directors on the Issue Date or
(2) whose nomination for election or election to the Board of Directors was approved by vote of at least a majority 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.
"Credit Facilities" means the one or more credit facilities to which Pride or one or more Subsidiaries is a party entered into from time to time, together with any related notes, guarantees, collateral documents and other instruments and other documents, in each case as amended, restated, supplemented, increased or otherwise modified from time to time, and any renewal, extension, refinancing, refund, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) of any of the foregoing.
"Currency Hedge Obligations" means, at any time as to any person, the obligations of such person at such time 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.
"Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.
"Determination Period" has the meaning specified under clause (1) of the definition of "Consolidated Interest Coverage Ratio."
"EBITDA" means, with respect to any person for any period, the Consolidated Net Income of such person, for such period, plus to the extent reflected in the income statement of such person for such period from which Consolidated Net Income is determined, without duplication:
(1) Consolidated Interest Expense,
(2) income tax expense,
(3) depreciation expense,
(4) amortization expense,
(5) any other non-cash charges, and
(6) reasonable expenses related to financings, asset sales and other transactions outside the ordinary course of business.
"Equity Offering" means any public or private sale made after the Issue Date by Pride of its common stock for cash on a primary basis.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute.
"Fair Market Value" means Fair Value as determined in good faith by (a) the principal financial officer of Pride if less than or equal to $25 million and (b) the Board of Directors of Pride if greater than $25 million.
"Fair Value" means the price that 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.
"GAAP" means United States generally accepted accounting principles, consistently applied, that are applicable to the circumstances as of the date of determination. All calculations made for purposes of determining compliance with the terms of the covenants set forth in " -- Restrictive Covenants" will, however, use GAAP in effect at the Issue Date.
A "holder," when used with respect to any note, means the person in whose name the note is registered in the security register.
"Indebtedness" as applied to any person means, at any time, without duplication:
(1) any obligation of such person, contingent or otherwise, for borrowed money;
(2) any obligation of such person evidenced by bonds, debentures, notes or other similar instruments;
(3) any obligation of such person upon which interest charges are customarily paid (other than accounts payable incurred in the ordinary course of business);
(4) 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);
(5) any Capital Lease Obligation;
(6) any Indebtedness 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 Indebtedness secured thereby has been assumed, by such person, the amount of such Indebtedness being deemed to be the lesser of the Fair Market Value of such Property or the amount of the Indebtedness so secured;
(7) any reimbursement obligation of such person in respect of any letter of credit or bankers acceptance;
(8) 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);
(9) any Interest Swap Obligation or Currency Hedge Obligation of such person; and
(10) any obligation that 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 this definition, the maximum fixed repurchase price of any Redeemable Stock or subsidiary preferred stock that does not have a fixed repurchase price will 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 will be required to be determined pursuant to the indenture; provided, however, that if such Redeemable Stock or subsidiary preferred stock is not then permitted to be repurchased, the repurchase price will be the book value of such Redeemable Stock or subsidiary preferred stock. The amount of Indebtedness of any person at any date will be:
(1) the outstanding book value at such date of all unconditional obligations as described above, and
(2) the maximum liability at such date of all contingent obligations as described above.
"Interest Swap Obligation" means, with respect to any person, its obligation 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;
- a capital contribution;
- a loan;
- an 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.
The term "Investment" will not, however, include any transaction involving the purchase or other acquisition (including by way of merger) of Property (including Capital Stock) by Pride or any Subsidiary in exchange for Capital Stock (other than Redeemable Stock) of Pride. The amount of any person's Investment will 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 as a dividend, repayment of loan or advance, release or discharge of a guarantee or other obligation or other transfer of Property or 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.
"Investment Grade Status" exists as of any time if at such time either:
- the rating assigned to the notes by Moody's is Baa3 (or the equivalent) or higher and by S&P is BB+ (or the equivalent) or higher, or
- the rating assigned to the notes by Moody's is Ba1 (or the equivalent) or higher and by S&P is BBB- (or the equivalent) or higher.
"Issue Date" means July 7, 2004, the date on which the notes are first authenticated and delivered under the 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.
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The definition of "Lien" includes 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 above.
"Limited Recourse Indebtedness" means
(1) Indebtedness with respect to the two drilling/workover barge rigs owned by Pride's Venezuelan Subsidiary as in effect on the Issue Date (the "Venezuelan Barge Financing"),
(2) Indebtedness incurred under the facility agreement dated as of March 25, 2004 among Martin Maritime Ltd., Andre Maritime Ltd., certain other parties and the lenders thereunder and related instruments and other documents as in effect on the Issue Date (the "Angola/Africa Drillship Financing"),
(3) Indebtedness incurred to finance all or a part of the purchase, acquisition, renovation or construction of capital assets and related items (including interest added to principal), or renewals, extensions, refinancings, refunds, repurchases or replacements (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) thereof or of the Venezuelan Barge Financing or the Angola/Africa Drilling Financing,
- for which the recourse of the holder of such Indebtedness is effectively limited to such capital assets and related items (including the Capital Stock of persons that own, whether directly or indirectly, such capital assets and related items and no other significant Property), or
- in which the recourse and security are similar to (or more favorable to Pride and its Subsidiaries than) the Venezuelan Barge Financing or the Angola/Africa Drillship Financing.
"Liquid Securities" means securities (1) of an issuer that is not an Affiliate of Pride, (2) that are publicly traded on the New York Stock Exchange, the American Stock Exchange, the Toronto Stock Exchange, the London Stock Exchange or the Nasdaq National Market and (3) as to which (a) Pride is not subject to any restrictions on sale or transfer (including any volume restrictions under Rule 144 under the Securities Act or any other restrictions imposed by the Securities Act), (b) a registration statement under the Securities Act covering the resale thereof is in effect, (c) Pride or a Subsidiary is entitled to registration rights under the Securities Act, or (d) in the case of any securities traded on the Toronto Stock Exchange or London Stock Exchange, Pride or a Subsidiary has rights comparable to those referred to in subclauses (b) and (c) of this clause (3), in each case in this clause (3) for as long as the securities are held; provided, however, that securities meeting the requirements of clauses (1), (2) and (3) of this definition shall be treated as Liquid Securities from the date of receipt thereof until and only until the earlier of (x) the date on which such securities are sold or exchanged for cash or cash equivalents and (y) one year following the date of receipt of such securities. If such securities are not sold or exchanged for cash or cash equivalents within one year of receipt thereof, then, for purposes of determining whether the transaction pursuant to which Pride or a Subsidiary received the securities complied with the provisions of the indenture described under " -- Restrictive Covenants -- Limitation on Asset Sales," such securities shall be deemed not to have been Liquid Securities at any time.
"Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.
"Net Available Proceeds" means
(1) as to any Asset Sale (other than a Bargain Purchase Contract) or Sale and Lease-Back Transaction, the Cash Proceeds from that sale, net of:
- all legal and title expenses, commissions and other fees and expenses incurred,
- all taxes payable as a consequence of such Asset Sale or Sale and Lease-Back Transaction,
- all payments made to any person other than Pride or a Subsidiary on any Indebtedness (a) in accordance with the terms of any Lien upon or with respect to such Property or (b) which must, by its terms or in order to obtain a necessary consent to such Asset Sale or Sale and Lease-Back Transaction or by applicable law, be repaid out of the proceeds from such Asset Sale or Sale and Lease-Back Transaction, excluding, however, any payments of revolving credit Indebtedness that are not accompanied by a permanent reduction of availability of revolving credit borrowings,
- with respect to any Asset Sale or Sale and Lease-Back Transaction by a Subsidiary, the equity interest in such Cash Proceeds of any holder of Capital Stock of such Subsidiary (other than Pride or any other Subsidiary),
- appropriate amounts to be provided by Pride or any Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale or Sale and Lease-Back Transaction and retained by Pride or any Subsidiary, as the case may be, after such Asset Sale or Sale and Lease-Back Transaction including pension and other post- employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale or Sale and Lease-Back Transaction,
- Cash Proceeds pursuant to the first bullet point of the third paragraph under " -- Restrictive Covenants -- Limitation on Asset Sales," and
(2) as to any Bargain Purchase Contract, an amount equal to:
- that portion of the rental or other payment stream arising under a Bargain Purchase Contract that represents an amount in excess of the Fair Market Value of the rental or other payments with respect to the pertinent Property, and
- the Cash Proceeds from the sale of such Property, net of the amounts set forth in clause (1) above, in each case as and when received.
"1999 Issue Date" means May 26, 1999, the date of original issue of our 10% Senior Notes due 2009.
"Non-Recourse Indebtedness" means Indebtedness or that portion of Indebtedness of a Non-Recourse Subsidiary as to which neither Pride nor any Subsidiary provides credit support constituting Indebtedness of Pride or any Subsidiary or is otherwise directly or indirectly liable (other than Indebtedness permitted to be incurred under the definition of Non-Recourse Subsidiary).
"Non-Recourse Subsidiary" means:
- any subsidiary of Pride that at the time of determination will be designated a Non-Recourse Subsidiary by the Board of Directors of Pride as provided below, and
- any subsidiary of a Non-Recourse Subsidiary.
The Board of Directors of Pride may designate any subsidiary of Pride as a Non-Recourse Subsidiary so long as:
(1) neither Pride nor any Subsidiary is directly or indirectly liable pursuant to the terms of any Indebtedness of such subsidiary or has made an Investment in such subsidiary, subject to the proviso described below, and
(2) such designation does not result in the creation or imposition of any Lien on any Property of Pride or any Subsidiary (other than any Permitted Lien or any Lien the creation or imposition of which is in compliance with the "Limitation on Liens" covenant).
With respect to clause (1) of this definition, however, Pride or a Subsidiary may be liable for Indebtedness of, and may have an Investment in, a Non-Recourse Subsidiary if:
- such liability or Investment constituted a Permitted Investment or a Restricted Payment permitted by the "Limitation on Restricted Payments" covenant, in each case at the time of incurrence, or
- the liability or Investment would be a Permitted Investment or a Restricted Payment permitted by the "Limitation on Restricted Payments" covenant, in each case at the time of designation of such Subsidiary as a Non-Recourse Subsidiary.
The Board of Directors of Pride may designate any Non-Recourse Subsidiary as a Subsidiary if, immediately after giving effect to such designation:
- no Default or Event of Default has occurred and is continuing,
- Pride could incur $1.00 of additional Indebtedness (not including the incurrence of Permitted Indebtedness) under the "Limitation on Indebtedness" covenant, and
- if any Property of Pride 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 is in compliance with the "Limitation on Liens" covenant.
"Parent Holding Company" means (a) from and after the time the common stock is not listed on a United States or foreign national or regional securities exchange or traded through the National Association of Securities Dealers Automated Quotation System or similar system or another entity succeeds to and is substituted for Pride under the indenture, an entity which, immediately after such time, had substantially the same stockholders, directly or indirectly, as Pride immediately prior to such time with holdings in substantially the same proportion as such stockholders' holdings in Pride immediately prior to such time, (b) from and after the sale, conveyance, assignment, transfer, lease or other disposition of all or substantially all of our and our Subsidiaries' assets, taken as a whole, Pride (as determined prior to the transaction) and (c) each Wholly Owned Subsidiary of another Parent Holding Company.
"Permitted Indebtedness" means
(1) Indebtedness of Pride under the notes issued on the Issue Date (including any new notes),
(2) Indebtedness of Pride or any Subsidiary incurred under one or more Credit Facilities (in addition to any such Indebtedness incurred in compliance with the Consolidated Interest Coverage Ratio under the "Limitation on Indebtedness" covenant) in an aggregate principal amount at any one time outstanding not to exceed the greater of:
- $800 million, and
- an amount equal to 20% of our Consolidated Net Tangible Assets determined as of the date of the incurrence of such Indebtedness (plus interest and fees under such Credit Facilities),
(3) Indebtedness of Pride or any Subsidiary under Interest Swap Obligations if:
- such Interest Swap Obligations are related to payment obligations on Indebtedness otherwise permitted under the covenant described in " -- Restrictive Covenants -- Limitation on Indebtedness," and
- 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,
(4) Indebtedness of Pride or any Subsidiary under Currency Hedge Obligations if
- such Currency Hedge Obligations are related to payment obligations on Indebtedness otherwise permitted under the covenant described in " -- Restrictive Covenants -- Limitation on Indebtedness" or to the foreign currency cash flows reasonably expected to be generated by Pride and the Subsidiaries, and
- 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,
(5) Indebtedness of Pride or any Subsidiary outstanding on the Issue Date,
(6) any subsidiary guarantees of the notes or any other Indebtedness of Pride and any assumption of the obligations guaranteed thereby,
(7) Indebtedness of Pride to any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of Pride,
(8) Indebtedness of any Subsidiary to Pride or any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of Pride,
(9) Indebtedness of Pride in connection with a purchase of the notes as a result of a Change in Control if:
- the aggregate principal amount of such Indebtedness does not exceed the aggregate Change in Control Purchase Price plus the related expenses of such purchase, and
- such Indebtedness has an Average Life equal to or greater than the remaining Average Life of the notes and does not mature prior to one year following the stated maturity of the notes,
(10) Indebtedness in respect of completion bonds, performance bonds, bid bonds, appeal bonds, surety bonds, bankers acceptances, letters of credit, insurance obligations or bonds and other similar bonds and obligations incurred by Pride or any Subsidiary that do not support any obligation for borrowed money, including any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations,
(11) Permitted Refinancing Indebtedness incurred with respect to
Indebtedness of Pride (excluding any Indebtedness described in clause (7)
above) described in clause (1), (2), (5), (6) or (9) above, this clause
(11) or the first sentence under the caption " -- Restrictive Covenants --
Limitation on Indebtedness,"
(12) Permitted Subsidiary Refinancing Indebtedness incurred with
respect to Indebtedness of any Subsidiary (excluding any Indebtedness
described in clause (8) above) described in clause (1), (2), (5), (6) or
(9) above, this clause (12) or the first sentence under the caption " --
Restrictive Covenants -- Limitation on Indebtedness,"
(13) Indebtedness of Pride or any Subsidiary represented by Capital Lease Obligations, Indebtedness of Pride or any Subsidiary described in clause (5) of the definition of "Permitted Liens" and Permitted Refinancing Indebtedness and Permitted Subsidiary Refinancing Indebtedness incurred with respect to either of the foregoing (in addition to any such Indebtedness incurred in compliance with the Consolidated Interest Coverage Ratio under the "Limitation on Indebtedness" covenant), in an aggregate principal amount that does not exceed 5% of our Consolidated Net Tangible Assets determined as of the date of the incurrence thereof (plus imputed interest and fees with respect to such Capital Lease Obligations and interest and fees under such other Indebtedness), and
(14) in addition to the items referred to in clauses (1) through
(13) above, Indebtedness of Pride or any Subsidiary in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other Indebtedness described in this clause (14) and then
outstanding, will not exceed $100 million at any one time outstanding.
For purposes of determining compliance with the "Limitation on Indebtedness" covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the Consolidated Interest Coverage Ratio test of such covenant, Pride will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with the covenant. To avoid duplication in determining the amount of Permitted Indebtedness under any clause of this definition, guarantees of, or obligations for letters of credit supporting, Indebtedness otherwise included in the determination of such amount will not also be included.
"Permitted Investments" means
(1) 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 million,
(2) commercial paper issued by any corporation, if such commercial paper has credit ratings of at least "A-l" by S&P and at least "P-l" by Moody's,
(3) U.S. Government Obligations with a maturity of four years or less,
(4) repurchase obligations for instruments of the type described in clause (3),
(5) shares of money market mutual or similar funds having assets in excess of $100 million,
(6) payroll advances in the ordinary course of business,
(7) other advances and loans to officers and employees of Pride or any Subsidiary, so long as the aggregate principal amount of such advances and loans does not exceed $2 million at any one time outstanding,
(8) Investments represented by proceeds from Asset Sales,
(9) Investments made by Pride in its Subsidiaries (or any person that will be a Subsidiary as a result of such Investment) or by a Subsidiary in Pride or in one or more Subsidiaries (or any person that will be a Subsidiary as a result of such Investment),
(10) Investments in stock, obligations or securities received in settlement of debts owing to Pride or any Subsidiary as a result of bankruptcy or insolvency proceedings or upon the foreclosure, perfection or enforcement of any Lien in favor of Pride or any Subsidiary, in each case as to debt owing to Pride or any Subsidiary that arose in the ordinary course of business of Pride or any such Subsidiary; for these purposes, 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 will be treated as having been cash or cash equivalents at the time received, and
(11) other Investments having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) that, when taken together with all other Investments made pursuant to this clause (11) since the Issue Date, do not exceed 10% of our Consolidated Net Tangible Assets determined as of the same date.
"Permitted Liens" means
(1) Liens in existence on the Issue Date,
(2) Liens created for the benefit of the notes,
(3) Liens on Property of a person existing at the time such person is merged or consolidated with or into, or acquired by, Pride or a Subsidiary or becomes a Subsidiary (and not incurred as a result of, or in anticipation of, such transaction), if such Liens relate solely to such Property and the proceeds thereof and accessories and upgrades thereto,
(4) Liens on Property existing at the time of the acquisition thereof (and not incurred as a result of, or in anticipation of, such transaction), if such Liens relate solely to such Property and the proceeds thereof and accessories and upgrades thereto,
(5) 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, if:
- the principal amount of Indebtedness secured by such Liens does not exceed 100% of the lesser of cost or Fair Market Value of the Property so acquired or constructed (including upgrade or refurbishment) plus transaction costs related thereto,
- such Liens do not encumber any other Property of Pride or any Subsidiary (other than the proceeds thereof and improvements, accessions and upgrades thereto and the Capital Stock of persons that own, whether directly or indirectly, principally such Property), and
- such Liens attach to such Property within 270 days of the later of commencement of commercial operations of such Property and completion of the acquisition or construction (including upgrade or refurbishment) of such Property,
(6) Liens securing Indebtedness of Pride or a Subsidiary represented by Capital Lease Obligations in an aggregate principal amount not to exceed 5% of our Consolidated Net Tangible Assets determined as of the date of the incurrence of such Liens (plus imputed interest and fees with respect to such Indebtedness),
(7) Liens to secure any extension, renewal, refinancing, refunding, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements), in whole or in part, of any Indebtedness secured by Liens permitted by this definition, if such Liens do not extend to any other Property of Pride 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,
(8) Liens granted by Pride to any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of Pride,
(9) Liens granted by any Subsidiary to Pride or any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of Pride,
(10) Liens securing Non-Recourse Indebtedness,
(11) Liens securing Indebtedness incurred under one or more Credit Facilities,
(12) Liens securing Permitted Indebtedness described in clauses (3),
(4) and (10) of the definition of "Permitted Indebtedness,"
(13) rights of set-off of banks and other persons,
(14) Liens or equitable encumbrances deemed to exist by reason of fraudulent conveyance or transfer laws or negative pledge or similar agreements to refrain from permitting Liens,
(15) Liens in existence on the occurrence of an Investment Grade Status Event,
(16) Liens in connection with any Securitization Transaction, and
(17) Liens not otherwise permitted by clauses (1) -- (16) above securing up to $100 million of other Indebtedness at any one time outstanding.
"Permitted Refinancing Indebtedness" means Indebtedness of Pride incurred in exchange for, or the net proceeds of which are used to renew, extend, refinance, refund, repurchase or replace, outstanding Indebtedness of Pride or a Subsidiary, which outstanding Indebtedness was incurred in accordance with, or is otherwise permitted by, the terms of the indenture, if:
(1) if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced is equal or subordinated in right of payment to the notes, then such new Indebtedness is equal 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, repurchased or replaced,
(2) such new Indebtedness is scheduled to mature later than the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(3) 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, repurchased or replaced, and
(4) 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, repurchased or replaced (or if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced 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 any premium incurred by Pride or any 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, repurchase or replace, outstanding Indebtedness of such Subsidiary or any other Subsidiary, which outstanding Indebtedness was incurred in accordance with or is otherwise permitted by the terms of the indenture, if:
(1) if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced is equal or subordinated in right of payment to the subsidiary guarantees of the notes, then such new Indebtedness is equal or subordinated, as the case may be, in right of payment (without regard to its being secured) to the subsidiary guarantees of the notes at least to the same extent as the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(2) such new Indebtedness is scheduled to mature later than the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(3) 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, repurchased or replaced, and
(4) 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, repurchased or replaced (or if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced 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 any premium incurred by Pride or such Subsidiary in connection therewith.
"Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
"Rating Decline" means that, at any time within 90 days (which period shall be extended so long as the rating of the notes is under publicly announced consideration for possible downgrade by either Moody's or S&P) after the date of public notice of a Change in Control, or of public notice of our intention or that of any other person to effect a Change in Control, the rating of the notes is decreased by both Moody's and S&P by one or more ratings categories and the notes following such downgrade do not qualify for Investment Grade Status.
"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, similar, ancillary or complementary to the business of Pride and its Subsidiaries on the Issue Date.
"Replacement Asset" means any Property that, as determined by the Board of Directors of Pride 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
(1) 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 Pride or any parent of Pride, or warrants, rights or options to acquire such Capital Stock, other than:
- dividends payable solely in the Capital Stock (other than Redeemable Stock) of Pride, or in warrants, rights or options to acquire such Capital Stock and
- dividends or distributions by a Subsidiary to Pride or to a Wholly Owned Subsidiary of Pride,
(2) 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, Subordinated Indebtedness of Pride or any subsidiary guarantor or
(3) make any Restricted Investment in any person.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.
"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.
"Securities Act" means the Securities Act of 1933, as amended, and any successor statute.
"Securitization Transaction" means any transaction in which Pride or any Subsidiary sells or otherwise transfers an interest in accounts receivable (i) to one or more third party purchasers or (ii) to a special purpose entity (including, without limitation, a Subsidiary) that borrows against such accounts receivable or sells such accounts receivable (or an undivided interest therein) to one or more third party purchasers, but only to the extent that amounts received in connection with the sale or other transfer of such accounts receivable would not under GAAP be accounted for as liabilities on a consolidated balance sheet of Pride.
"Senior Debt" means any Indebtedness incurred by Pride or any subsidiary guarantor, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the notes or the subsidiary guarantees, as the case may be. Senior Debt will not include:
(1) any liability for taxes owed or owing by Pride,
(2) any Indebtedness owing to any Subsidiaries,
(3) any obligations with respect to Capital Stock of Pride,
(4) any trade payables, or
(5) any Indebtedness that is incurred in violation of the indenture.
"Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.
"Subordinated Indebtedness" means any Indebtedness of Pride or any subsidiary guarantor (other than intercompany Indebtedness) that is subordinated in right of payment to the notes or the subsidiary guarantees, as the case may be, pursuant to a written agreement to that effect and does not mature prior to one year following the stated maturity of the notes.
The term "subsidiary" means, with respect to any person:
(1) any corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by such person, or by one or more other subsidiaries of such person, or by such person and one or more other subsidiaries of such person,
(2) any general partnership, limited liability company, 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
(3) any limited partnership of which such person or any subsidiary of such person is a general partner.
The term "Subsidiary" means a subsidiary of Pride other than a Non-Recourse Subsidiary.
"U.S. Government Obligations" means securities that are:
(1) direct obligations of the United States of America the payment of which its full faith and credit is pledged,
(2) 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, or
(3) 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, if (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.
In either case under clause (1) or (2) above, "U.S. Government Obligations" includes only those obligations that are not callable or redeemable at the option of the issuer thereof.
"Voting Stock" means, with respect to any person, securities of any class or classes of Capital Stock of 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, with respect to a person, any subsidiary of that person to the extent
(1) all of the Voting Stock of such subsidiary, other than any director's qualifying shares mandated by applicable law, is owned directly or indirectly by such person or
(2) such subsidiary is organized in a foreign jurisdiction and is required by the applicable laws and regulations of such foreign jurisdiction to be partially owned by the government of such foreign jurisdiction or individual or corporate citizens of such foreign jurisdiction in order for such subsidiary to transact business in such foreign jurisdiction, if such person:
- directly or indirectly owns the remaining Capital Stock of 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.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
We have based the following discussion on the current provisions of the Internal Revenue Code of 1986, applicable Treasury regulations, judicial authority and administrative rulings. We have not obtained an opinion of counsel and have not sought a ruling from the Internal Revenue Service, and we can give you no assurance that the IRS will agree with the following discussion. Changes in the applicable law may occur that may be retroactive and could affect the tax consequences to you of the receipt of new notes in exchange for old notes in the exchange offer. We do not discuss the effect of special rules such as those that apply to insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations, and a person who is not a citizen or resident of the United States. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF RECEIVING NEW NOTES IN EXCHANGE FOR OLD NOTES IN THE EXCHANGE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAW.
We believe that the receipt of new notes in exchange for old notes in the exchange offer should not be treated as an exchange for United States federal income tax purposes because the new notes and the old notes are not materially different in kind or in extent, and as a result on the receipt of new notes in exchange for old notes in the exchange offer you should not recognize gain or loss, your initial tax basis in the new notes should be the same as your adjusted tax basis in the old notes immediately before such exchange, and your holding period for the new notes should include your holding period for the old notes.
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC in no-action letters issued to third parties, we believe that you may transfer new notes issued in the exchange offer in exchange for the old notes if:
- you acquire the new notes in the ordinary course of your business; and
- you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of new notes.
We believe that you may not transfer new notes issued in the exchange offer in exchange for the old notes if you are:
- our "affiliate" within the meaning of Rule 405 under the Securities Act;
- a broker-dealer that acquired old notes directly from us; or
- a broker-dealer that acquired old notes as a result of market-making activities or other trading activities, unless you comply with the registration and prospectus delivery provisions of the Securities Act.
If you wish to exchange your old notes for new notes in the exchange offer, you will be required to make representations to us as described in "The Exchange Offer -- Procedures for Tendering -- Your Representations to Us" of this prospectus and in the letter of transmittal. In addition, each broker-dealer that receives new notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of those new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as it may be amended or supplemented, available to any broker-dealer for use in connection with any such resale. Any broker-dealers required to use this prospectus and any amendments or supplements to this prospectus for resales of the new notes must notify us of this fact by checking the box on the letter of transmittal requesting additional copies of these documents.
We are entitled under the registration rights agreement to suspend the use of this prospectus by broker-dealers under specified circumstances. For example, we may suspend the use of this prospectus if:
- the SEC requests an amendment or supplement to this prospectus or the related registration statement or additional information;
- the SEC issues any stop order suspending the effectiveness of the registration statement or initiates proceedings for that purpose;
- we receive notification of the suspension of the qualification of the new notes for sale in any jurisdiction or the initiation of any proceeding for that purpose;
- we determine that the suspension is required by law or the suspension is taken by us in good faith and for valid business reasons, including the acquisition or divestiture of assets or a material corporate transaction or event; or
- the happening of any event makes any statement made in this prospectus untrue in any material respect or constitutes an omission to state a material fact in this prospectus.
If we suspend the use of this prospectus, the 180-day period referred to above will be extended by a number of days equal to the period of the suspension.
We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account under the exchange offer may be sold from time to time in one or more transactions:
- in the over-the-counter market;
- in negotiated transactions;
- through the writing of options on those notes; or
- a combination of those methods of resale.
The prices at which these sales occur may be:
- at market prices prevailing at the time of resale;
- at prices related to prevailing market prices; or
- at negotiated prices.
Any resales may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the selling broker-dealer and/or the purchasers of the new notes. Any broker-dealer that resells new notes received by it for its own account under the exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all reasonable expenses incidental to the exchange offer, including the reasonable expenses of one counsel for the holders of old notes, other than commissions and concessions of any broker or dealer. We also have agreed that we will indemnify specified holders of the notes, including broker-dealers, against certain liabilities, including liabilities under the Securities Act.
TRANSFER RESTRICTIONS ON OLD NOTES
The old notes were not registered under the Securities Act. Accordingly, we offered and sold the old notes only in private sales exempt from or not subject to the registration requirements of the Securities Act:
- to "qualified institutional buyers" under Rule 144A under the Securities Act; and
- outside the United States in compliance with Regulation S under the Securities Act.
You may not offer or sell those old notes in the United States or to, or for the account or benefit of, U.S. persons except in transactions exempt from or not subject to the Securities Act registration requirements.
LEGAL MATTERS
Baker Botts L.L.P., Houston, Texas, our outside legal counsel, has issued an opinion about the legality of the new notes.
EXPERTS
The financial statements incorporated in this prospectus by reference to the audited historical financial statements included as exhibit 99.1 to Pride International, Inc.'s Current Report on Form 8-K dated August 10, 2004 (which contains (1) an explanatory paragraph that Pride has changed its policies for consolidation of variable interest entities and for presentation of gains and losses on debt retirement and, in 2002, changed the manner in which it accounts for goodwill and (2) an explanatory paragraph that Pride has restated its segment information set forth in note 15 to reflect its segments on a basis consistent with its current operating organization), have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
With respect to the unaudited interim consolidated financial information of Pride International, Inc. for the three-month periods ended March 31, 2004 and 2003 and the three-month and six-month periods ended June 30, 2004 and 2003 incorporated by reference in this prospectus, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports dated May 10, 2004 and August 6, 2004 incorporated by reference herein state that they did not audit and they do not express an opinion on that unaudited consolidated financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim consolidated financial information because such reports are not a "report" or a "part" of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act of 1933.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further information regarding the operation of the SEC's public reference room by calling the SEC at 1-800-SEC-0330. Our filings are also available to the public on the SEC's Internet site located at http://www.sec.gov. You can also obtain information about us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
This prospectus is part of a registration statement we have filed with the SEC relating to the notes. As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You may refer to the registration statement, exhibits and schedules for more information about us and these securities. The registration statement, exhibits and schedules are available at the SEC's public reference room or through its Internet site.
The SEC allows us to "incorporate by reference" into this prospectus information we file with the SEC, which means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference in this prospectus is considered to be part of this prospectus. Information that we file later with the SEC that is deemed incorporated by reference into this prospectus (but not information filed with or furnished to the SEC and not deemed incorporated) will automatically update and supersede information previously included.
We are incorporating by reference into this prospectus the documents
listed below and any subsequent filings we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act (excluding information
deemed to be furnished and not filed with the SEC) until the offering made by
this prospectus terminates:
- our annual report on Form 10-K for the fiscal year ended December 31, 2003;
- our quarterly reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004; and
- our current reports on Form 8-K filed with the SEC on January 12, 2004, April 13, 2004, June 15, 2004, June 23, 2004, June 29, 2004, July 13, 2004 and August 10, 2004, in each case other than information furnished under Items 9 or 12 of Form 8-K.
You may request a copy of these filings (other than an exhibit to those filings unless we have specifically incorporated that exhibit by reference into the filing), at no cost, by writing or telephoning us at the following address:
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
Attention: W. Gregory Looser
Vice President, General Counsel and Secretary
Telephone: (713) 789-1400
[PRIDE INTERNATIONAL LOGO]
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, inter alia, empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Similar indemnity is authorized for such persons against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the shareholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145. Pride expects to maintain policies insuring its and its subsidiaries' officers and directors against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act of 1933, as amended.
Article Seventh of the Certificate of Incorporation of Pride eliminates the personal liability of each director of Pride to Pride and its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that such provision does not eliminate or limit the liability of a director (i) for any breach of such director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Title 8, Section 174 of the Delaware General Corporation Law, as the same exists or as such provision may hereafter be amended, supplemented or replaced, or (iv) for any transactions from which such director derived an improper personal benefit.
The Bylaws of Pride provide that Pride will indemnify and hold harmless, to the fullest extent permitted by applicable law in effect as of the date of the adoption of the Bylaws and to such greater extent as applicable law may thereafter permit, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit, arbitration, alternative dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director, officer, employee, agent or fiduciary of (i) Pride, (ii) any predecessor of Pride, (iii) Pride Oil Well Service Company, a Texas corporation ("Pride Oil Well"), (iv) Pride International, Inc., a Louisiana corporation ("Old Pride"), (v) Marine Drilling Companies, Inc., a Texas corporation ("Marine"), (vi) any subsidiary of Pride, Pride Oil Well, Old Pride or Marine or (vii) any other corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise which the person is or was serving at the request of Pride ("corporate status") against any and all losses, liabilities, costs, claims, damages and expenses actually and reasonably incurred by him or on his behalf by reason of his corporate status.
The Bylaws further provide that Pride will pay the expenses reasonably incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses will be made only upon receipt of (i) a written undertaking executed by or on behalf of the person to be indemnified to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified by Pride and (ii) satisfactory evidence as to the amount of such expenses.
II-1
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following instruments and documents are included as Exhibits to this Registration Statement. Exhibits incorporated by reference are so indicated by parenthetical information.
EXHIBIT NO. EXHIBIT
----------- -------
4.1 -- Indenture, dated as of July 1, 2004, between Pride and
JPMorgan Chase Bank, as trustee.
4.2 -- First Supplemental Indenture dated as of July 7, 2004,
between Pride and JPMorgan Chase Bank, including the form of
note.
4.3 -- Registration Rights Agreement dated July 7, 2004, among
Pride, Citigroup Global Markets Inc. and the other initial
purchasers named therein.
5.1 -- Opinion of Baker Botts L.L.P. as to the legality of the
securities.
12.1 -- Computation of ratio of earnings to fixed charges
for each of the years in the five-year period ended December
31, 2003 (incorporated by reference to Exhibit 12 to our
annual report on Form 10-K for the year ended December 31,
2003, SEC File No. 001-13289).
12.2 -- Computation of ratio of earnings to fixed charges for the
six-month period ended June 30, 2004 (incorporated by
reference to Exhibit 12 to our quarterly report on Form 10-Q
for the quarter ended June 30, 2004, SEC File No. 001-13289).
15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the
Registration Statement).
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of JPMorgan Chase Bank, as
trustee under the Indenture, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Depository Trust Company Participants.
99.4 -- Form of Letter to Clients.
|
Not applicable.
II-2
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless, in the opinion of its counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-3
(d) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on August 10, 2004.
PRIDE INTERNATIONAL, INC.
By: /s/ Louis A. Raspino
--------------------------------
Louis A. Raspino
Executive Vice President and
Chief Financial Officer
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POWER OF ATTORNEY
Each person whose signature appears below appoints Paul A. Bragg, Louis A. Raspino and W. Gregory Looser, and each of them, severally, as his or her true and lawful attorney or attorneys-in-fact and agent or agents, each of whom shall be authorized to act with or without the other, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in his or her capacity as a director or officer or both, as the case may be, of Pride International, Inc., to sign any and all amendments (including post-effective amendments) to this Registration Statement and all documents or instruments necessary or appropriate to enable Pride International, Inc. to comply with the Securities Act of 1933, as amended, and to file the same with the Securities and Exchange Commission, with full power and authority to each of said attorneys-in-fact and agents to do and perform in the name and on behalf of each such director or officer, or both, as the case may be, each and every act whatsoever that is necessary, appropriate or advisable in connection with any or all of the above-described matters and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON AUGUST 10, 2004.
SIGNATURE TITLE
--------- -----
/s/ Paul A. Bragg Chief Executive Officer and Director
-------------------------------- (Principal Executive Officer)
Paul A. Bragg
/s/ Louis A. Raspino Executive Vice President and Chief Financial Officer
-------------------------------- (Principal Financial Officer)
Louis A. Raspino
/s/ Douglas G. Smith Vice President, Controller and Chief Accounting Officer
-------------------------------- (Principal Accounting Officer)
Douglas G. Smith
/s/ William E. Macaulay Chairman of the Board
--------------------------------
William E. Macaulay
/s/ Robert L. Barbanell Director
--------------------------------
Robert L. Barbanell
/s/ David A.B. Brown Director
--------------------------------
David A. B. Brown
/s/ J. C. Burton Director
--------------------------------
J. C. Burton
Director
--------------------------------
Jorge E. Estrada
/s/ Ralph D. McBride Director
--------------------------------
Ralph D. McBride
/s/ David B. Robson Director
--------------------------------
David B. Robson
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
----------- -------
4.1 -- Indenture, dated as of July 1, 2004, between Pride and
JPMorgan Chase Bank, as trustee.
4.2 -- First Supplemental Indenture dated as of July 7, 2004,
between Pride and JPMorgan Chase Bank, including the form of
note.
4.3 -- Registration Rights Agreement dated July 7, 2004, among
Pride, Citigroup Global Markets Inc. and the other initial
purchasers named therein.
5.1 -- Opinion of Baker Botts L.L.P. as to the legality of the
securities.
12.1 -- Computation of ratio of earnings to fixed charges for each of
the years in the five-year period ended December 31, 2003
(incorporated by reference to Exhibit 12 to our annual report
on Form 10-K for the year ended December 31, 2003, SEC File
No. 001-13289).
12.2 -- Computation of ratio of earnings to fixed charges for the
six-month period ended June 30, 2004 (incorporated by
reference to Exhibit 12 to our quarterly report on Form 10-Q
for the quarter ended June 30, 2004, SEC File No. 001-13289).
15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Baker Botts L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the
Registration Statement).
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of JPMorgan Chase Bank, as
trustee under the Indenture, on Form T-1.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Letter to Depository Trust Company Participants.
99.4 -- Form of Letter to Clients.
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Exhibit 4.1
PRIDE INTERNATIONAL, INC.
as Issuer
and
JPMORGAN CHASE BANK
as Trustee
Indenture
Dated as of July 1, 2004
Debt Securities
PRIDE INTERNATIONAL, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF JULY 1, 2004
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
----------- ---------
Section 310 (a)(1)....................................................................... 7.10
(a)(2)....................................................................... 7.10
(a)(3)....................................................................... Not Applicable
(a)(4)....................................................................... Not Applicable
(a)(5)....................................................................... 7.10
(b).......................................................................... 7.08, 7.10
Section 311 (a).......................................................................... 7.11
(b).......................................................................... 7.11
(c).......................................................................... Not Applicable
Section 312 (a).......................................................................... 2.07
(b).......................................................................... 10.03
(c).......................................................................... 10.03
Section 313 (a).......................................................................... 7.06
(b).......................................................................... 7.06
(c).......................................................................... 7.06
(d).......................................................................... 7.06
Section 314 (a).......................................................................... 4.03, 4.04
(b).......................................................................... Not Applicable
(c)(1)....................................................................... 10.04
(c)(2)....................................................................... 10.04
(c)(3)....................................................................... Not Applicable
(d).......................................................................... Not Applicable
(e).......................................................................... 10.05
Section 315 (a).......................................................................... 7.01(b)
(b).......................................................................... 7.05
(c).......................................................................... 7.01(a)
(d).......................................................................... 7.01(c)
(d)(1)....................................................................... 7.01(c)(1)
(d)(2)....................................................................... 7.01(c)(2)
(d)(3)....................................................................... 7.01(c)(3)
(e).......................................................................... 6.11
Section 316 (a)(1)(A).................................................................... 6.05
(a)(1)(B).................................................................... 6.04
(a)(2)....................................................................... Not Applicable
(a)(last sentence)........................................................... 2.11
(b).......................................................................... 6.07
Section 317 (a)(1)....................................................................... 6.08
(a)(2)....................................................................... 6.09
(b).......................................................................... 2.06
Section 318 (a).......................................................................... 10.01
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE................................................. 1
SECTION 1.01 Definitions...................................................................... 1
SECTION 1.02 Other Definitions................................................................ 5
SECTION 1.03 Incorporation by Reference of Trust Indenture Act................................ 5
SECTION 1.04 Rules of Construction............................................................ 6
ARTICLE II THE SECURITIES............................................................................ 6
SECTION 2.01 Amount Unlimited; Issuable in Series............................................. 6
SECTION 2.02 Denominations.................................................................... 9
SECTION 2.03 Forms Generally.................................................................. 9
SECTION 2.04 Execution, Authentication, Delivery and Dating................................... 10
SECTION 2.05 Registrar and Paying Agent....................................................... 11
SECTION 2.06 Paying Agent to Hold Money in Trust.............................................. 12
SECTION 2.07 Holder Lists..................................................................... 12
SECTION 2.08 Transfer and Exchange............................................................ 12
SECTION 2.09 Replacement Securities........................................................... 13
SECTION 2.10 Outstanding Securities........................................................... 13
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.... 14
SECTION 2.12 Temporary Securities............................................................. 14
SECTION 2.13 Cancellation..................................................................... 14
SECTION 2.14 Payments; Defaulted Interest..................................................... 15
SECTION 2.15 Persons Deemed Owners............................................................ 15
SECTION 2.16 Computation of Interest.......................................................... 15
SECTION 2.17 Global Securities; Book-Entry Provisions......................................... 16
ARTICLE III REDEMPTION............................................................................... 18
SECTION 3.01 Applicability of Article......................................................... 18
SECTION 3.02 Notice to the Trustee............................................................ 18
SECTION 3.03 Selection of Securities To Be Redeemed........................................... 18
SECTION 3.04 Notice of Redemption............................................................. 19
SECTION 3.05 Effect of Notice of Redemption................................................... 20
SECTION 3.06 Deposit of Redemption Price...................................................... 20
SECTION 3.07 Securities Redeemed in Part...................................................... 20
SECTION 3.08 Purchase of Securities........................................................... 21
SECTION 3.09 Mandatory and Optional Sinking Funds............................................. 21
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities............................ 21
SECTION 3.11 Redemption of Securities for Sinking Fund........................................ 21
ARTICLE IV COVENANTS................................................................................. 22
SECTION 4.01 Payment of Securities............................................................ 22
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SECTION 4.02 Maintenance of Office or Agency.................................................. 22
SECTION 4.03 SEC Reports; Financial Statements................................................ 23
SECTION 4.04 Compliance Certificate........................................................... 24
SECTION 4.05 Corporate Existence.............................................................. 24
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.......................................... 24
SECTION 4.07 Additional Amounts............................................................... 24
ARTICLE V SUCCESSORS................................................................................. 25
SECTION 5.01 Limitations on Mergers and Consolidations........................................ 25
SECTION 5.02 Successor Person Substituted..................................................... 26
ARTICLE VI DEFAULTS AND REMEDIES..................................................................... 26
SECTION 6.01 Events of Default................................................................ 26
SECTION 6.02 Acceleration..................................................................... 28
SECTION 6.03 Other Remedies................................................................... 29
SECTION 6.04 Waiver of Defaults............................................................... 29
SECTION 6.05 Control by Majority.............................................................. 29
SECTION 6.06 Limitations on Suits............................................................. 30
SECTION 6.07 Rights of Holders to Receive Payment............................................. 30
SECTION 6.08 Collection Suit by Trustee....................................................... 30
SECTION 6.09 Trustee May File Proofs of Claim................................................. 31
SECTION 6.10 Priorities....................................................................... 31
SECTION 6.11 Undertaking for Costs............................................................ 32
ARTICLE VII TRUSTEE.................................................................................. 32
SECTION 7.01 Duties of Trustee................................................................ 32
SECTION 7.02 Rights of Trustee................................................................ 33
SECTION 7.03 May Hold Securities.............................................................. 34
SECTION 7.04 Trustee's Disclaimer............................................................. 34
SECTION 7.05 Notice of Defaults............................................................... 34
SECTION 7.06 Reports by Trustee to Holders.................................................... 34
SECTION 7.07 Compensation and Indemnity....................................................... 35
SECTION 7.08 Replacement of Trustee........................................................... 35
SECTION 7.09 Successor Trustee by Merger, etc................................................. 37
SECTION 7.10 Eligibility; Disqualification.................................................... 37
SECTION 7.11 Preferential Collection of Claims Against the Company............................ 38
ARTICLE VIII DISCHARGE OF INDENTURE.................................................................. 38
SECTION 8.01 Termination of the Company's Obligations......................................... 38
SECTION 8.02 Application of Trust Money....................................................... 42
SECTION 8.03 Repayment to Company............................................................. 42
SECTION 8.04 Reinstatement.................................................................... 42
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS.................................................... 42
SECTION 9.01 Without Consent of Holders....................................................... 42
SECTION 9.02 With Consent of Holders.......................................................... 44
SECTION 9.03 Compliance with Trust Indenture Act.............................................. 45
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SECTION 9.04 Revocation and Effect of Consents................................................ 46
SECTION 9.05 Notation on or Exchange of Securities............................................ 46
SECTION 9.06 Trustee to Sign Amendments, etc.................................................. 46
ARTICLE X MISCELLANEOUS.............................................................................. 47
SECTION 10.01 Trust Indenture Act Controls..................................................... 47
SECTION 10.02 Notices.......................................................................... 47
SECTION 10.03 Communication by Holders with Other Holders...................................... 48
SECTION 10.04 Certificate and Opinion as to Conditions Precedent............................... 48
SECTION 10.05 Statements Required in Certificate or Opinion.................................... 48
SECTION 10.06 Rules by Trustee and Agents...................................................... 49
SECTION 10.07 Legal Holidays................................................................... 49
SECTION 10.08 No Recourse Against Others....................................................... 49
SECTION 10.09 Governing Law.................................................................... 49
SECTION 10.10 No Adverse Interpretation of Other Agreements.................................... 49
SECTION 10.11 Successors....................................................................... 50
SECTION 10.12 Severability..................................................................... 50
SECTION 10.13 Counterpart Originals............................................................ 50
SECTION 10.14 Table of Contents, Headings, etc................................................. 50
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INDENTURE dated as of July 1, 2004 between Pride International, Inc., a Delaware corporation (the "Company"), and JPMorgan Chase Bank, a New York state banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's unsecured debentures, notes or other evidences of indebtedness (the "Securities") to be issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other 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, means 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.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors or comparable governing body of the Company or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors or comparable governing body of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person; provided, however, that for purposes of any provision contained herein which is required by the TIA, "Company" shall also mean each other obligor (if any) on the Securities of a series.
"Company Order" and "Company Request" mean, respectively, a written order or request signed in the name of the Company by two Officers of the Company, and delivered to the Trustee.
"Corporate Trust Office of the Trustee" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which, in the case of JPMorgan Chase Bank, shall be 4 New York Plaza, 15th Floor, New York, New York 10004.
"Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.
"deliver" or "delivery" means, in the context of certificated Securities, actual physical delivery of the certificated Securities to the relevant Person required hereunder, together with all endorsements, and in the context of Global Securities, the designation on the records of the Depositary of a change in the beneficial interests of a holder in a Global Security.
"Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter "Depositary" shall mean or include such successor.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute.
"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global form in the name of the Depositary with respect thereto or its nominee.
"Government Obligations" means, with respect to a series of Securities, (i) direct obligations of a government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clause (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 Government Obligations or a specific payment of interest on or principal of any such 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 Government Obligation evidenced by such depository receipt.
"Holder" means a Person in whose name a Security is registered.
"Indenture" means this Indenture as amended or supplemented from time to time pursuant to the provisions hereof, and includes the terms of a particular series of Securities established as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, shall have the meaning assigned to such term in the Security as contemplated by Section 2.01.
"Issue Date" means, with respect to Securities of a series, the first date on which the Securities of such series are originally issued under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York; Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed.
"Maturity" means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of a Person.
"Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. Such counsel may be an employee of or counsel to the Company or the Trustee.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 6.02.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency, instrumentality or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any series, the place or places where the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of that series are payable as specified in accordance with Section 2.01 subject to the provisions of Section 4.02.
"principal" of a Security means the principal of the Security plus, when appropriate, the premium, if any, on the Security.
"Redemption Date" means, with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Responsible Officer" means any officer within the corporate trust department of the Trustee having direct responsibility for the administration of this Indenture or any other officer to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
"Rule 144A Securities" means Securities of a series designated pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
"Security Custodian" means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, as custodian with respect to the Securities of such series, or any successor entity thereto.
"Stated Maturity" means, when used with respect to any Security or any installment of principal thereof or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
"Subsidiary" means a Person at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock having voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
"surrender" shall have the same meaning as "deliver" in the context of the surrender of a Security.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on the date hereof; provided, however, that, in the event the Trust Indenture Act of 1939 is amended
after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter "Trustee" means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the States and the District of Columbia) and its territories and possessions, which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
"U.S. Government Obligations" means Government Obligations with respect to Securities payable in Dollars.
SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Agent Members".................................................... 2.17
"Bankruptcy Custodian"............................................. 6.01
"Conversion Event"................................................. 6.01
"covenant defeasance".............................................. 8.01
"Event of Default"................................................. 6.01
"Exchange Rate".................................................... 2.11
"Judgment Currency"................................................ 6.10
"legal defeasance"................................................. 8.01
"mandatory sinking fund payment"................................... 3.09
"optional sinking fund payment".................................... 3.09
"Paying Agent"..................................................... 2.05
"Registrar"........................................................ 2.05
"Required Currency"................................................ 6.10
"Successor"........................................................ 5.01
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SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture (and if the Indenture is not qualified under the TIA at the time, as if it were so qualified unless otherwise provided). The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined by a TIA reference to another statute or defined by an SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this instrument to Articles and Sections are references to the corresponding Articles and Sections in and of this instrument.
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers' Certificate of the Company or in a Company Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series);
(2) if there is to be a limit, the limit upon the
aggregate principal amount of the Securities of the series that may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 and except for any
Securities that, pursuant to Section 2.04 or 2.17, are deemed never to
have been authenticated and delivered hereunder); provided, however,
that unless otherwise provided in the terms of the series, the
authorized aggregate principal amount of such series may be increased
before or after the issuance of any Securities of the series by a Board
Resolution (or action pursuant to a Board Resolution) to such effect;
(3) whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series;
(4) the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14;
(5) the date or dates on which the principal of and premium (if any) on the Securities of the series is payable or the method of determination thereof;
(6) the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date, or if other than provided herein, the Person to whom any interest on Securities of the series shall be payable;
(7) the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company must exercise any such option, if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple thereof, the denomination in which any Securities of that series shall be issuable;
(11) if other than Dollars, the currency or currencies (including composite currencies) or the form, including equity securities, other debt securities (including Securities), warrants or any other securities or property of the Company or any other Person, in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;
(13) if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02;
(15) any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series pursuant to Article VIII or any modifications of or deletions from such conditions or limitations;
(16) any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of the Company set forth in Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or exchangeable for capital stock, other debt securities (including Securities), warrants, other equity securities
or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange;
(19) whether the Securities of the series are to be entitled to the benefit of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers' Certificate or Company Order referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers' Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate or Company Order setting forth the terms of the series.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto. The Securities may have notations, legends or endorsements required by law, securities exchange rule, the Company's certificate of incorporation, bylaws or other similar governing documents, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities.
The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially the following form:
"This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
JPMORGAN CHASE BANK, as Trustee
By: ____________________________________
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on behalf of the Company by manual or facsimile signature. If an Officer of the Company whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless.
A Security shall not be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of an authorized signatory of the Trustee, which signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company delivers such Security to the Trustee for cancellation as provided in
Section 2.13, together with a written statement (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, and the Trustee shall authenticate and deliver such Securities for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order. Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined. If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity dates or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to
above and the other documents required by Section 10.04), and (subject to
Section 7.01) shall be fully protected in relying upon:
(a) an Officers' Certificate setting forth the Board
Resolution and, if applicable, an appropriate record of any action
taken pursuant thereto, as contemplated by the last paragraph of
Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) the form of such Securities has been established in conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been established in conformity with the provisions of this Indenture; and
(iii) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Officers' Certificate and Opinion of Counsel at the time of issuance of each such Security, but such Officers' Certificate and Opinion of Counsel shall be delivered at or before the time of issuance of the first Security of the series to be issued.
The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange ("Registrar") and an office or agency where Securities of such series may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Securities of such series and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. The Company may change any Paying Agent or Registrar without notice to any Holder. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any Subsidiary may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent.
SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Company shall furnish to the Trustee at least five Business Days before each Interest Payment Date with respect to such series of Securities, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01:
When Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's written request and submission of the Securities or Global
Securities. No service charge shall be made to a Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in
accordance with the provisions of Section 2.04. Notwithstanding any other
provisions of this Indenture to the contrary, the Company shall not be required
to register the transfer or exchange of (a) any Security selected for redemption
in whole or in part pursuant to Article III, except the unredeemed portion of
any Security being redeemed in part, or (b) any Security during the period
beginning 15 Business Days prior to the mailing of notice of any offer to
repurchase Securities of the series required pursuant to the terms thereof or of
redemption of Securities of a series to be redeemed and ending at the close of
business on the day of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the Holder of a Security claims that the Security has been destroyed, lost or stolen and the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Company shall issue and the Trustee shall authenticate a replacement Security of the same series if the Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. If required by the Trustee or the Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company and the Trustee may charge a Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in
the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a protected purchaser.
If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.
In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal amount of a Security denominated in a foreign currency shall be the Dollar equivalent, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for such currency, as such rate is certified for customs purposes by the Federal Reserve Bank of New York (the "Exchange Rate") on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent, as determined by the Company by reference to the Exchange Rate on the date of original issuance of such Security, of the amount determined as provided in (a) above), of such Security and (c) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such direction, amendment, supplement, waiver or consent, only Securities that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund. Unless the Company shall direct in writing that canceled Securities be returned to it, all canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the Trustee shall maintain a record of their disposal. The Company may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
Unless otherwise provided as contemplated by Section 2.01, interest (except defaulted interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at the close of business on the record date next preceding such Interest Payment Date, even if such Securities are canceled after such record date and on or before such Interest Payment Date. The Holder must surrender a Security to a Paying Agent to collect principal payments. Unless otherwise provided with respect to the Securities of any series, the Company will pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities in Dollars. Such amounts shall be payable at the offices of the Trustee or any Paying Agent, provided that at the option of the Company, the Company may pay such amounts (1) by wire transfer with respect to Global Securities or (2) by check payable in such money mailed to a Holder's registered address with respect to any Securities.
If the Company defaults in a payment of interest on the
Securities of any series, the Company shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest on the defaulted interest, in
each case at the rate provided in the Securities of such series and in Section
4.01. The Company may pay the defaulted interest to the Persons who are Holders
on a subsequent special record date. At least 15 days before any special record
date selected by the Company, the Company (or the Trustee, in the name of and at
the expense of the Company upon 20 days' prior written notice from the Company
setting forth such special record date and the interest amount to be paid) shall
mail to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) or interest on or any Additional Amounts with respect to such Security and for all other purposes. None of the Company, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a
Global Security, as contemplated by Section 2.01, then, notwithstanding clause
(10) of Section 2.01 and the provisions of Section 2.02, any such Global
Security shall represent such of the outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, transfers or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee (i) in such manner and upon instructions
given by such Person or Persons as shall be specified in such Security or in a
Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii)
otherwise in accordance with written instructions or such other written form of
instructions as is customary for the Depositary for such Security, from such
Depositary or its nominee on behalf of any Person having a beneficial interest
in such Global Security. Subject to the provisions of Section 2.04 and, if
applicable, Section 2.12, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given by the Person
or Persons specified in such Security or in the applicable Company Order. With
respect to the Securities of any series that are represented by a Global
Security, the Company authorizes the execution and delivery by the Trustee of a
letter of representations or other similar agreement or instrument in the form
customarily provided for by the Depositary appointed with respect to such Global
Security. Any Global Security may be deposited with the Depositary or its
nominee, or may remain in the custody of the Trustee or the Security Custodian
therefor pursuant to a FAST Balance Certificate Agreement or similar agreement
between the Trustee and the Depositary. If a Company Order has been, or
simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 10.05 and need not be accompanied by an
Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee or the Security Custodian as its custodian, or under such Global Security, and the Depositary may be treated by the Company, the Trustee or the Security Custodian and any agent of the Company, the Trustee or the Security Custodian as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a Global Security of a series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of Securities of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Company, the Trustee or the Security Custodian, or any agent of the Company, the Trustee or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01: Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary. Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if, and only if, either (1) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Security and a successor Depositary is not appointed by the Company within 90 days of such notice, (2) an Event of Default has occurred with respect to such series and is continuing and the Registrar has received a request from the Depositary to issue Securities in lieu of all or a portion of the Global Security (in which case the Company shall deliver Securities within 30 days of such request) or (3) the Company determines not to have the Securities represented by a Global Security.
In connection with any transfer of a portion of the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interests in the Global Security to be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.
In connection with the transfer of all the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interests in the Global Security, an equal aggregate principal amount of Securities of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. Neither the Company nor the Trustee shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Global Security together with written instructions (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) with regard
to the cancellation or reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01, payment of principal of, premium (if any) and interest
on and any Additional Amounts with respect to any Global Security shall be made to the Depositary.
The Company in issuing Securities of any series may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders of Securities of such series; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities of such series or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities of such series, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers.
Notwithstanding anything herein to the contrary, delivery or surrender of a Security shall not be required in the case of Global Securities in order to obtain the rights or benefits provided hereunder upon the delivery or surrender of a Security.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III.
SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and the principal amount of Securities of such series to be redeemed. The Company shall so notify the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers' Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of no effect.
SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the outstanding Securities of such series (and tenor) not previously called for redemption, either pro rata, by lot or by such other method as the Trustee shall deem appropriate in accordance with industry standards at the time of such redemption and that may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of
that series or of the principal amount of Global Securities of such series; provided that, if at the time of redemption such Securities are registered as a Global Security, the Depositary shall determine, in accordance with its procedures, the principal amount of such Securities held by each beneficial owner of Securities to be redeemed.
The Trustee shall promptly notify the Company and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any of the Securities redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 days (or not less than 15 days in the case of convertible Securities) nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at the address of such Holder appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price (or the method of calculating or determining the Redemption Price);
(3) that, unless the Company defaults in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder;
(5) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and the name and address of the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such is the case;
(7) if such Securities are convertible into or exchangeable for capital stock, other debt securities (including Securities), warrants, other equity securities or any other securities or property of the Company or any other Person, the name and address of the
conversion or exchange agent, the date on which the right to convert or exchange is terminated and the conversion or exchange rate; and
(8) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
By 11:00 a.m., New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or the Paying Agent (or, if the Company
is acting as the Paying Agent, segregate and hold in trust as provided in
Section 2.06) an amount of money in same day funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on and any Additional Amounts with respect to,
the Securities or portions thereof which are to be redeemed on that date, other
than Securities or portions thereof called for redemption on that date which
have been delivered by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect to such Securities except for the right to receive the Redemption Price upon surrender of such Securities. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal, premium, if any, any Additional Amounts, and, to the extent lawful, accrued interest thereon shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the Securities or, in the case of Original Issue Discount Securities, such Securities' yield to maturity.
SECTION 3.07 Securities Redeemed in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Security or Securities, of the same series and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the Company and any Affiliate of the Company may at any time purchase or otherwise acquire Securities in the open market or by private agreement. Any such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Company may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate of the Company specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and will also deliver or cause to be delivered to the Trustee any Securities to be so delivered. Failure of the Company to timely deliver or cause to be delivered such Officers' Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute the election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver
or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $100,000 (or the Dollar equivalent thereof based on the applicable Exchange Rate on the date of original issue of the applicable Securities) or a lesser sum if the Company shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof as aforesaid) or less and the Company makes no such request then it shall be carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof as aforesaid) is available. Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture. Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent (other than the Company or a Subsidiary) holds by 11:00 a.m., New York City time, on that date money deposited by the Company designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium (if any), at a rate equal to the then applicable interest rate on the Securities to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may be served. Unless otherwise designated by the Company by written notice to the Trustee, such office or agency shall be the office of the Trustee in The City of New York, which on the date hereof is located at 4 New York Plaza, 15th Floor, New York, New York 10004. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) If the Company is subject to Section 13 or 15(d) of the Exchange Act, the Company shall file with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If this Indenture is qualified under the TIA, but not otherwise, the Company shall also comply with the provisions of TIA Section 314(a).
(b) If the Company is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall furnish to all
Holders of Rule 144A Securities and prospective purchasers of Rule 144A
Securities designated by the Holders of Rule 144A Securities, promptly upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) promulgated under the Securities Act of 1933, as amended.
(c) The Company intends to file the reports, information and documents referred to in Section 4.03(a) hereof with the SEC in electronic form pursuant to Regulation S-T promulgated by the SEC using the SEC's Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system. The Company shall notify the Trustee in the manner prescribed herein of each such filing. The Trustee is hereby authorized and directed to access the EDGAR system for purposes of retrieving the reports so filed. Compliance with the foregoing shall constitute delivery by the Company of such reports to the Trustee in compliance with the provisions of TIA Section 314(a). The Trustee shall have no duty to search for or obtain any electronic or other filings that the Company makes with the SEC, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of the reports, information and documents to the Trustee pursuant to this Section 4.03 shall be solely for the purposes of compliance with this Section 4.03 and with TIA Section 314(a). The Trustee's receipt of such reports, information and documents shall not constitute notice to it of the content thereof or of any matter determinable from the content
thereof, including the Company's compliance with any of its covenants hereunder, as to which the Trustee is entitled to rely upon Officers' Certificates.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a statement signed by the principal executive officer, principal financial officer or principal accounting officer of the Company, which need not constitute an Officers' Certificate, complying with TIA Section 314(a)(4) and stating that in the course of performance by the signing Officer of his duties as such Officer of the Company he would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Company of its obligations under this Indenture, and further stating that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are outstanding, deliver to the Trustee, as soon as practicable, but in no event more than five Business Days, after any Officer of the Company becoming aware of any Default or Event of Default under this Indenture, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Corporate Existence.
Subject to Article V, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive it from paying all or any portion of the principal of or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or the net proceeds received from the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.07 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.07 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.
The Company shall not consolidate with or merge into any Person, or sell, lease, convey, assign, transfer or otherwise dispose of, in any transaction or series of transactions, all or substantially all of its assets to any Person, unless:
(1) either (a) the Company shall be the continuing Person or (b) the Person (if other than the Company) formed by such consolidation or into which the Company is merged, or to which such sale, lease, conveyance, assignment, transfer or other disposition shall be made (collectively, the "Successor"), is 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, any other member of the European Union, or the Netherlands Antilles, and expressly assumes by supplemental indenture the due and punctual payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to all the Securities and the performance of the Company's covenants and obligations under this Indenture and the Securities;
(2) immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall have occurred and be continuing or would result therefrom;
(3) in the case of clause (1)(b) above, in the event that the Successor is organized in a jurisdiction other than the United States of America, any political subdivision thereof or any State thereof or the District of Columbia which is different from the jurisdiction in which the obligor on the Securities was organized immediately before giving effect to the transaction or series of transactions, (a) the Successor delivers to the Trustee an Opinion of Counsel stating that (1) the obligations of the Successor are enforceable under the laws of the new jurisdiction of its formation subject to customary exceptions and (2) the Holders of Securities will not recognize any income, gain or loss for United States Federal income tax purposes as a result of the transaction or series of transactions and will be subject to United States 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 or series of transactions had not occurred; (b) the Successor agrees in writing
to submit to jurisdiction to the competent courts of the State of New York or the federal district court sitting in The City of New York and appoints an agent in the State of New York for the service of process, each under terms satisfactory to the Trustee; and (c) the Board of Directors of the Company or the comparable governing body of the Successor, as applicable, determines in good faith that such transaction or series of transactions will not adversely affect the interest of the Holders of Securities in any material respect, which determination shall be evidenced by a Board Resolution (or its equivalent if the Successor is not a corporation) to such effect; and
(4) in the case of clause (1)(b) above, the Successor delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, the Successor formed by such consolidation or into which the Company is merged or to which such sale, lease, conveyance, assignment, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and the Securities with the same effect as if such Successor had been named as the Company herein, and the predecessor Company, in the case of a sale, conveyance, assignment, transfer or other disposition, shall be released from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an "Event of Default," wherever used herein with respect to Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days;
(2) the Company defaults in the payment of (A) the principal of any Security of that series at its Maturity or (B) premium (if any) on any Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series, and such default continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants or agreements in, or provisions of, the Securities of such series or this Indenture (other than an agreement, covenant or provision that has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series) which shall not have been remedied within the specified period after written notice, as specified in the last paragraph of this Section 6.01;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:
(A) is for relief against the Company as debtor in an involuntary case,
(B) appoints a Bankruptcy Custodian of the Company or a Bankruptcy Custodian for all or substantially all of the property of the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
When a Default or Event of Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Security is payable in a currency or currencies (including a composite currency) other than Dollars and such currency or currencies are not available to the Company for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company (a "Conversion Event"), the Company will be entitled to satisfy its obligations to Holders of the Securities by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Company by reference to the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section
6.01, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall give written notice thereof to the Trustee; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in Section 10.02 to the Holders. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the Company shall give notice in the manner provided in Section 10.02 to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not
an Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in principal amount of the then outstanding Securities of the series
affected by such Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by such
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any
series at the time outstanding (other than an Event of Default specified in
clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Securities of the series affected by such Event of Default (or,
in the case of an Event of Default described in clause (4) of Section 6.01, if
outstanding Securities of other series are affected by such Event of Default,
then at least 25% in principal amount of the then outstanding Securities so
affected) by notice to the Company and the Trustee, may declare the principal of
(or, if any such Securities are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) and all
accrued and unpaid interest on all then outstanding Securities of such series or
of all series, as the case may be, to be due and payable. Upon any such
declaration, the amounts due and payable on the Securities shall be due and
payable immediately. If an Event of Default specified in clause (5) or (6) of
Section 6.01 hereof occurs, such amounts shall ipso facto become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee or any Holder. The Holders of a majority in principal amount
of the then outstanding Securities of the series affected by such Event of
Default or all series so affected, as the case may be, by written notice to the
Trustee may rescind an acceleration and its consequences (other than nonpayment
of principal of or premium or interest on or any Additional Amounts with respect
to the Securities) if (i) the rescission would not conflict with any judgment or
decree, (ii) all existing Events of Default with respect to Securities of that
series (or of all series, as the case may be) have been cured or waived, except
nonpayment of principal, premium, interest or any Additional Amounts that has
become due solely because of the acceleration, and (iii) the Trustee has been
paid any amounts due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series or of all series affected thereby (acting as one class) by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series or all series so affected, as the case may be, and its consequences (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or all series so affected or a solicitation of consents in respect of Securities of such series or all series so affected, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series or all series so affected (but the terms of such offer or solicitation may vary from series to series)), except (1) a continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on or any Additional Amounts with respect to any Security or (2) a continued Default in respect of a provision that under Section 9.02 cannot be amended or supplemented without the consent of each Holder affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default described in clause (1), (2), (3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a majority in principal amount of all the then outstanding Securities affected may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it not relating to or arising under such an Event of Default. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action.
SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if:
(1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the Holders of a majority in principal amount of the Securities of such series do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of
Section 6.01 hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the amount of principal, premium (if any), interest and any
Additional Amounts remaining unpaid on the Securities of the series affected by
the Event of Default, and interest on overdue principal and premium, if any,
and, to the extent lawful, interest on overdue interest, and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix record dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose of obtaining a judgment against the Company in any court it is necessary to convert the sum due in respect of the principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities of any series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used for purposes of rendering the
judgment shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day in The City of New York next preceding that on which final judgment is given. Neither the Company nor the Trustee shall be liable for any shortfall nor shall it benefit from any windfall in payments to Holders of Securities under this Section 6.10 caused by a change in exchange rates between the time the amount of a judgment against it is calculated as above and the time the Trustee converts the Judgment Currency into the Required Currency to make payments under this Section 6.10 to Holders of Securities, but payment of such judgment shall discharge all amounts owed by the Company on the claim or claims underlying such judgment.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in such exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default with respect to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. All money received by the Trustee shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require instruction, an Officers' Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such instruction, Officers' Certificate or Opinion of Counsel. The Trustee may consult at the Company's expense with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.
(f) The Trustee shall not be charged with knowledge of
any Default or Event of Default with respect to the Securities, unless either
(1) a Responsible Officer shall have actual knowledge of such Default or Event
of Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or by any Holder of the Securities, and
such notice references the Securities and this Indenture.
(g) The permissive rights of the Trustee enumerated herein shall not be construed as duties.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is known to the Trustee, the Trustee shall mail to Holders of Securities of such series a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Holders of Securities of such series.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of this Indenture, the Trustee shall mail to Holders of a series and the Company a brief report dated as of such reporting date that complies with TIA Section 313(a); provided, however, that if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series. The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a series of Securities shall be filed by the Company with the SEC and each securities exchange, if any, on which the
Securities of such series are listed. The Company shall notify the Trustee if and when any series of Securities is listed on any securities exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee for its acceptance of this Indenture and services hereunder such compensation as the Company and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee and any predecessor Trustee against any and all loss, liability, damage, claim or expense, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next following paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee's negligence or bad faith.
To secure the payment obligations of the Company in this
Section 7.07, the Trustee shall have a lien prior to the Securities on all money
or property held or collected by the Trustee, except that held in trust to pay
principal of, premium (if any) and interest on and any Additional Amounts with
respect to Securities of any series. Such lien and the Company's obligations
under this Section 7.07 shall survive the resignation or removal of the Trustee
and the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series then outstanding may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any series does not take office within 30 days after the retiring or removed Trustee resigns or is removed, the retiring or removed Trustee (at the expense of the Company), the Company or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series.
In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee. Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. On request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Such retiring Trustee shall, however, have the right to deduct its unpaid fees and expenses, including attorneys' fees.
Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Company under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however, that in the case of a transfer of all or substantially all of its corporate trust business to another corporation, the transferee corporation expressly assumes all of the Trustee's liabilities hereunder.
In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a corporation or banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by Federal or State (or the District of Columbia) authority and shall have, or be a subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition.
The Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA Section 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against the Company.
The Trustee is subject to and shall comply with the provisions
of TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of the Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Company's obligations under Section 7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when:
(1) either:
(A) all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and, in the case of clause (i), (ii) or (iii) above, the
Company has irrevocably deposited or caused to be deposited
with the Trustee as funds (immediately available to the
Holders in the case of clause (i)) in trust for such purpose
(x) money in the currency in which payment of the Securities
of such series is to
be made in an amount, or (y) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (z) a combination thereof, which will be sufficient, in the opinion (in the case of clauses (y) and (z)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Securities of such series for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or for principal, premium, if any, and interest to the Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable by it hereunder with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable to Securities of a series as contemplated by Section 2.01, the Company may, at its option, terminate certain of its obligations under this Indenture ("covenant defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series, (i) money in the currency in which payment of the Securities of such series is to be made in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (iii) a combination thereof, that is sufficient, in the opinion (in the case of clauses (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal of and premium (if any) and interest on all Securities of such series on each date that such principal, premium (if any) or interest is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such Government Obligations to the payment of said principal, premium (if any) and interest with respect to the Securities of such series as the same shall become due;
(2) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
(4) the Company shall have delivered to the Trustee an
Opinion of Counsel from a nationally recognized counsel acceptable to
the Trustee or a private letter ruling issued by the United States
Internal Revenue Service to the effect that the Holders will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of the Company's exercise of its option under this
Section 8.01(b) and will be subject to United States 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 option had not been exercised;
(5) the Company has complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA Section 310(b).
In such event, this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture. However, the Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 7.07, 7.08 and 8.04, the Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding. Thereafter, only the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's obligations in Section 8.03 shall survive with respect to Securities of such series.
After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal of or premium (if any) or interest on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. Government Obligations shall not be callable at the issuer's option.
(c) If the Company has previously complied or is concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as
contemplated by Section 2.01, the Company may elect that its obligations to make payments with respect to Securities of such series be discharged ("legal defeasance"), if:
(1) no Default or Event of Default under clauses (5) and
(6) of Section 6.01 hereof shall have occurred at any time during the
period ending on the 91st day after the date of deposit contemplated by
Section 8.01(b) (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance, which opinion is based on (i) a private letter ruling issued by the United States Internal Revenue Service addressed to the Company, (ii) a published ruling of the United States Internal Revenue Service pertaining to a comparable form of transaction or (iii) a change in the applicable United States Federal income tax law (including regulations) after the date of this Indenture;
(3) the Company has complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request requesting such legal defeasance of the Securities of such series and an Officers' Certificate stating that all conditions precedent with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
In such event, the Company will be discharged from its obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of such series, the Company's obligations under Sections 4.01 and 4.02 shall terminate with respect to such Securities, and the entire indebtedness of the Company evidenced by such Securities shall be deemed paid and discharged.
(d) If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, the Company may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series.
(e) If Securities of any series subject to subsections
(a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory or optional sinking fund provisions, the terms of
the applicable trust arrangement shall provide for such redemption, and the
Company shall make such arrangements as are reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made.
SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company any excess money or Government Obligations (or proceeds therefrom) held by them at any time upon the written request of the Company.
Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remains unclaimed for two years after the date upon which such payment shall have become due. After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Company has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the Securities or waive any provision hereof or thereof without the consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons);
(4) to provide any security for, or to add any guarantees of or additional obligors on, any series of Securities;
(5) to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company;
(7) to add any additional Events of Default with respect to all or any series of the Securities (and, if any such Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision;
(9) to establish the form or terms of Securities of any series as permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Section 8.01; provided, however, that any such action shall not
adversely affect the interest of the Holders of Securities of such
series or any other series of Securities in any material respect; or
(11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08.
Upon the request of the Company, accompanied by a Board
Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall, subject to Section 9.06, join with the Company
in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture with the consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with the Company in the execution of such amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the then outstanding Securities of one or more series or of all series (acting as one class) may waive compliance in a particular instance by the Company with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest, including default interest, on any Security;
(3) reduce the principal of, any premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02;
(4) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts with respect to any Security;
(6) change the coin or currency or currencies (including composite currencies) in which any Security or any premium, interest or Additional Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02;
(9) waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities; or
(10) if applicable, make any change that materially and adversely affects the right to convert any Security.
A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company in a notice furnished to Holders in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before a date and time therefor identified by the Company in a notice furnished to such Holder in accordance with the terms of this Indenture or, if no such date and time shall be identified, the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date (which need not comply with TIA Section 316(c)) for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it is of the type described in any of clauses
(1) through (9) of Section 9.02 hereof. In such case, the amendment, supplement
or waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding Security, the Company may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security at the request of the Company regarding the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement.
Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall be entitled to receive, in addition to the documents required by Section 10.04, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of Counsel provided at the expense of the Company to the effect that such amendment or supplement is authorized or permitted by this Indenture.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control.
SECTION 10.02 Notices.
Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
Attention: General Counsel Telephone: (713) 789-1400 Facsimile: (713) 914-9796
If to the Trustee:
JPMorgan Chase Bank
Attn: Institutional Trust Services Telephone: (212) 623-6796 Facsimile: (212) 623-6167
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder's address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received.
If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to the Trustee or the Company by Holders, shall be in writing, except as otherwise set forth herein.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set forth in Section 10.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or the Paying Agent may make reasonable rules and set reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the Company or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities or for any obligations of the Company or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities.
SECTION 10.09 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF NEW YORK REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
SECTION 10.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.11 Successors.
All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12 Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby.
SECTION 10.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 10.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
PRIDE INTERNATIONAL, INC.
By: /s/ Steven D. Oldham --------------------------------------- Steven D. Oldham Vice President - Treasury and Investor Relations |
JPMORGAN CHASE BANK, as Trustee
By: /s/ Larry O'Brien --------------------------------------- Larry O'Brien Vice President |
Exhibit 4.2
PRIDE INTERNATIONAL, INC.
and
JPMORGAN CHASE BANK,
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of July 7, 2004
Supplementing the Indenture dated as of July 1, 2004
7 3/8% SENIOR NOTES DUE 2014
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 SUPPLEMENT OF THE ORIGINAL INDENTURE...................................................... 1
Section 1.01. Supplement to Article I of the Original Indenture................................. 1
Section 1.02. Supplement to Article II of the Original Indenture................................ 27
Section 1.03. Supplement to Article III of the Original Indenture............................... 27
Section 1.04. Supplement to Article IV of the Original Indenture................................ 32
Section 1.05. Supplement to Article V of the Original Indenture................................. 42
Section 1.06. Supplement to Article VI of the Original Indenture................................ 43
Section 1.07. Supplement to Article VIII of the Original Identure............................... 44
Section 1.08. Supplement to Article IX of the Original Indenture................................ 45
Section 1.09. New Article XI.................................................................... 45
Section 1.10. Effect of Article 1............................................................... 49
ARTICLE 2 THE NOTES................................................................................. 49
Section 2.01. Form and Terms.................................................................... 49
Section 2.02. Designation, Amount, etc.......................................................... 50
Section 2.03. Transfer of Transfer Restricted Securities....................................... 50
Section 2.04. Restrictive Legend................................................................ 52
ARTICLE 3 REPRESENTATIONS OF THE COMPANY............................................................ 53
Section 3.01. Authority of the Company.......................................................... 53
Section 3.02. Truth of Recitals and Statements.................................................. 53
ARTICLE 4 CONCERNING THE TRUSTEE.................................................................... 53
Section 4.01. Acceptance of Trusts.............................................................. 53
Section 4.02. No Responsibility of Trustee for Recitals, Etc.................................... 54
ARTICLE 5 MISCELLANEOUS PROVISIONS.................................................................. 54
Section 5.01. Relation to the Original Indenture................................................ 54
Section 5.02. Meaning of Terms.................................................................. 54
Section 5.03. Counterparts of Supplemental Indenture............................................ 54
Section 5.04. Governing Law..................................................................... 54
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EXHIBIT A: Form of Note
EXHIBIT B: Form of Supplemental Indenture
EXHIBIT C: Certificate to be Delivered Upon Exchange or Registration of
Transfer of Securities Pursuant to Rule 144A, Etc.
EXHIBIT D: Certificate to be Delivered in Connection with Transfers of
Securities Pursuant to Regulation S
APPENDIX A: Form of Registration Rights Agreement
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of July 7, 2004 is between Pride International, Inc., a Delaware corporation (the "Company"), and JPMorgan Chase Bank, a New York state banking corporation, as Trustee (the "Trustee") under the Indenture (as defined 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 dated as of July 1, 2004 (the "Original Indenture") pursuant to which the Securities are issuable;
WHEREAS, Sections 2.01, 2.03 and 9.01 of the Original Indenture provide that the form or terms of any series of Securities may be established in an Indenture supplemental thereto, and the Company desires to establish in this First Supplemental Indenture both the form and terms of a series of Securities designated as its 7 3/8% Senior Notes due 2014 (the "Notes"); and
WHEREAS, all things necessary to authorize the execution and delivery of this First Supplemental Indenture, to establish the Notes as provided for in this First Supplemental Indenture, and to make the Original Indenture, as supplemented by this First Supplemental Indenture and as it may otherwise be supplemented thereafter with applicability to the Notes (the Original Indenture, as so supplemented, 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 Notes, as follows:
ARTICLE 1
SUPPLEMENT OF THE ORIGINAL INDENTURE
SECTION 1.01. Supplement to Article I of the Original Indenture.
Section 1.01 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:
"Additional Interest" means any additional interest owing with respect to the Notes under a Registration Rights Agreement. Unless the context otherwise requires, all references to "interest" in relation to the Notes include any Additional Interest that may be payable thereon.
"Additional Notes" has the meaning specified in Section 2.02(b) of the First Supplemental Indenture.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the amount by which the Fair Value of the Properties of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such date.
"Affiliate" of any specified Person means any other 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 Stock of a Person shall be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease or other disposition (including any disposition by means of a merger or consolidation) by the Company or any of its Subsidiaries to any Person other than the Company or a Wholly Owned Subsidiary, in one transaction or a series of related transactions, of:
(1) 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
(2) any of the Company's or its Subsidiaries' other Property other than:
(A) sales of drill-string components or 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 its or its Subsidiaries' business,
(B) any drilling contract, charter (bareboat or otherwise) or other lease of Property entered into by the Company or any of its Subsidiaries in the ordinary course of business, other than any Bargain Purchase Contract,
(C) a Permitted Investment or Restricted Payment permitted under Section 4.10,
(D) a Change in Control,
(E) a consolidation, merger or disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in compliance with the provisions of Section 5.01,
(F) any trade or exchange by the Company or any of its Subsidiaries of one or more drilling rigs or other vessels or equipment for one or more other Replacement Assets owned or held by another Person, if:
- 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 asset (together with cash or cash equivalents to be received by the Company or such Subsidiary) acquired, as determined in good faith by the principal financial officer of the Company for Fair Values less than or equal to $25 million, in good faith by the Board of Directors for Fair Values greater than $25 million but less than or equal to $100 million and by written appraisal by a nationally (or industry) recognized investment banking firm or appraisal firm for Fair Values greater than $100 million, and
- such exchange is approved by a majority of the Company's disinterested directors,
(G) transfers of the Pride Illinois, Pride Kentucky, Pride West Virginia and Pride Pennsylvania,
(H) Securitization Transactions and Sale and Lease-Back Transactions permitted under Section 4.15 and
(I) any transaction or series of related transactions that, but for this clause (I), would be Asset Sales, if:
- the Company elects to designate such transaction or series of related transactions as not constituting an Asset Sale, and
- the aggregate Net Available Proceeds from such transaction or any such series of related transactions so designated do not exceed $10,000,000.
An Asset Sale also includes the requisition of title to, seizure of or forfeiture of any Property, or any actual or constructive total loss or an agreed or compromised total loss of any Property.
"Asset Sale Offer" has the meaning specified in Section 4.14.
"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 the agreement during or at the end of its term for less than Fair Market Value of the Property at the time such right to acquire the 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 4.16, 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 or Sale and Lease-Back Transaction by any Person, the aggregate consideration received for such transaction 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 of "Asset Sale"), including payments for 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 noncash consideration received with respect to an Asset Sale to the extent that such noncash consideration consists of:
(1) publicly traded debt securities rated as "BBB-" or higher by S&P and "Baa3" or higher by Moody's, or
(2) other Indebtedness of a Person if:
- 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
- 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, or
(3) the items described in clauses (1), (2),
(3), (4) and (5) under the definition of "Permitted Investments."
"Change in Control" means: (1) a determination by the Company that any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than a
Parent Holding Company 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; (2) the Company is merged with or into or consolidated with another Person and, immediately after giving effect to the merger or consolidation, less than 50% of the outstanding Voting Stock of the surviving or resulting Person is 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, or (z) a Parent Holding Company; (3) the Company, either individually or in conjunction with one or more Subsidiaries, sells, conveys, transfers or leases, or the Subsidiaries sell, convey, transfer or lease, all or substantially all of the assets of the Company and the Subsidiaries, taken as a whole (either in one transaction or a series of related transactions), including Capital Stock of the Subsidiaries, to any Person (other than a Parent Holding Company or a Wholly Owned Subsidiary of the Company); (4) the liquidation or dissolution of the Company; or (5) the first day on which a majority of the individuals who constitute the Board of Directors are not Continuing Directors.
"Change in Control Purchase Date" has the meaning specified in
Section 3.12(a).
"Change in Control Purchase Notice" has the meaning specified in Section 3.12(c).
"Change in Control Purchase Price" has the meaning specified in Section 3.12(a).
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.
"Common Stock" means common stock, par value $.01 per share, of the Company as it exists on the Issue Date or any other Capital Stock of the Company into which such Common Stock shall be reclassified or changed.
"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 between a subsidiary that is not a Non-Recourse Subsidiary and 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:
(1) the Company's aggregate amount of EBITDA for the latest four fiscal quarters for which financial information is available immediately prior to the applicable Transaction Date (the "Determination Period") to
(2) the Company's aggregate Consolidated Interest Expense that is anticipated to accrue during a period consisting of the fiscal quarter in which the Transaction Date occurs and the three subsequent fiscal quarters (based upon the pro forma amount and maturity of, and interest payments on, Indebtedness of the Company and its consolidated Subsidiaries expected by the Company to be outstanding on the Transaction Date and reasonably anticipated by it 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 on floating interest rate obligations equal to the base interest rates on such obligations in effect as of the Transaction Date.
This calculation is subject to the following qualifications:
(1) if the Company or any of its consolidated Subsidiaries is a party to any Interest Swap Obligation that 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 will be used for such four-quarter period or portion thereof;
(2) 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 will be calculated as if such Indebtedness were so incurred or retired on the first day of the fiscal quarter in which the Transaction Date occurs; and
(3) 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 will be calculated on a pro forma basis as if the transaction had occurred on the first day of the Determination Period, and if, during the same four fiscal quarters:
- the Company or any of its consolidated Subsidiaries shall have engaged in any Asset Sale, EBITDA for such period will 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 Property that is the subject of the 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
- 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) will be calculated on a pro forma basis as if such acquisition and related financing had occurred on the first day of the period.
"Consolidated Interest Expense" means, with respect to any Person for any period, without duplication, the sum of:
(1) the aggregate amount of cash and noncash interest expense (including capitalized interest) of such Person and its subsidiaries (other than Non-Recourse Subsidiaries) for such period as determined on a consolidated basis in accordance with GAAP for Indebtedness, including, without limitation:
- any amortization of debt discount;
- net costs associated with Interest Swap Obligations (including any amortization of discounts);
- the interest portion of any deferred payment obligation;
- all accrued interest; and
- 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 for Non-Recourse Indebtedness;
(2) 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;
(3) the portion of any rental obligation of such Person or its subsidiaries (other than Non-Recourse Subsidiaries) for any Capital Lease Obligation allocable to interest expense in accordance with GAAP;
(4) 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
(5) to the extent any debt of any other Person is guaranteed by such Person or any of its subsidiaries (other than Non-Recourse Subsidiaries), 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.
There shall be excluded from the calculation of Consolidated Interest Expense, to the extent included above, amortization or writeoff of deferred financing costs of such Person
and its subsidiaries during such period and any charge related to 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 each case, Consolidated Interest Expense shall be calculated 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 however, there shall be excluded from the calculation the following, without duplication:
(1) 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 will 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;
(2) gains and losses from Asset Sales or reserves relating thereto;
(3) items classified as extraordinary (other than the tax benefit, if any, of the utilization of net operating loss carryforwards or alternative minimum tax credits) and expenses for early retirement of debt;
(4) in the case of any computation of
Consolidated Net Income for purposes of determining compliance with
Section 4.10, 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;
(5) any gain or loss, net of taxes, realized on the termination of any employee pension benefit plan;
(6) 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 during such period by such subsidiary to such Person;
(7) the cumulative effect of changes in accounting principles; and
(8) 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 Tangible Assets" of any Person means, as of any date, the consolidated assets of such Person and its subsidiaries (other than Non-Recourse Subsidiaries) at such date, after eliminating intercompany items between such Person and its subsidiaries (other than Non-Recourse Subsidiaries) or between subsidiaries (other than between a subsidiary that is not a Non-Recourse Subsidiary and Non-Recourse Subsidiaries) 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 (i) who is a member of the Board of Directors and (ii) either (A) who was a member of the Board of Directors on the Issue Date or (B) whose nomination for election or election to the Board of Directors was approved by vote of at least a majority 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.
"Credit Facilities" means the one or more credit facilities to which the Company or one or more Subsidiaries is a party entered into from time to time, together with any related notes, guarantees, collateral documents and other instruments and other documents, in each case as amended, restated, supplemented, increased or otherwise modified from time to time, and any renewal, extension, refinancing, refund, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) of any of the foregoing.
"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
(1) of the definition of "Consolidated Interest Coverage Ratio."
"Distribution Compliance Period" has the meaning specified in
Section 2.03(c) of the First Supplemental Indenture.
"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:
(1) Consolidated Interest Expense,
(2) income tax expense,
(3) depreciation expense,
(4) amortization expense,
(5) any other non-cash charges, and
(6) reasonable expenses related to financings, asset sales and other transactions outside the ordinary course of business.
"Equity Offering" means any public or private sale made after the Issue Date by the Company of its Common Stock for cash on a primary basis.
"Excess Proceeds" has the meaning specified in Section 4.14.
"Exchange Notes" means the Company's 7 3/8% Senior Notes due 2014, issued pursuant to this Indenture in connection with an Exchange Offer.
"Exchange Offer" means an offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Transfer Restricted Securities, to issue and deliver to such Holders, in exchange for such Transfer Restricted Securities, a like aggregate principal amount of Exchange Notes, which offer is registered under the Securities Act.
"Fair Market Value" means Fair Value as determined in good faith by (a) the principal financial officer of the Company if less than or equal to $25 million and (b) the Board of Directors if greater than $25 million.
"Fair Value" means the price that 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.
"First Supplemental Indenture" means the First Supplemental Indenture, dated as of the Issue Date, between the Company and the Trustee, supplementing and amending the Original Indenture as set forth therein.
"Funding Subsidiary Guarantor" has the meaning specified in
Section 11.01.
"GAAP" means, at any date of determination, United States generally accepted accounting principles, consistently applied, that are applicable to the circumstances as of such date; provided, however, that all calculations made for purposes of determining
compliance with the provisions set forth in Sections 4.09 through 4.17 shall utilize GAAP in effect at the Issue Date.
The term "incur" has the meaning specified in Section 4.11.
"Indebtedness" as applied to any Person means, at any time, without duplication:
(1) any obligation of such Person, contingent or otherwise, for borrowed money;
(2) any obligation of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) any obligation of such Person upon which interest charges are customarily paid (other than accounts payable incurred in the ordinary course of business);
(4) 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);
(5) any Capital Lease Obligation;
(6) any Indebtedness 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 Indebtedness secured thereby has been assumed, by such Person, the amount of such Indebtedness being deemed to be the lesser of the Fair Market Value of such Property or the amount of the Indebtedness so secured;
(7) any reimbursement obligation of such Person in respect of any letter of credit or bankers acceptance;
(8) 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);
(9) any Interest Swap Obligation or Currency Hedge Obligation of such Person; and
(10) any obligation that 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 this definition, 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 at such date of all contingent obligations as described above.
"Indenture" has the meaning specified in the recitals to the First Supplemental Indenture.
"Initial Purchasers" means (1) with respect to the Notes issued on the Issue Date, Citigroup Capital Markets Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc., Natexis Bleichroeder Inc., BNP Paribas Securities Corp. and Calyon Securities (USA) Inc. and (2) with respect to each issuance of Additional Notes, whether or not registered under the Securities Act, the Persons purchasing such Additional Notes under the related Purchase Agreement.
"Interest Swap Obligation" 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 (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 as a dividend, repayment of loan or advance, release or discharge of a guarantee or other obligation or other transfer of Property or 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.
"Investment Grade Status" exists as of any time if at such time either:
- the rating assigned to the Notes by Moody's is Baa3 (or the equivalent) or higher and by S&P is BB+ (or the equivalent) or higher, or
- the rating assigned to the Notes by Moody's is Ba1 (or the equivalent) or higher and by S&P is BBB- (or the equivalent) or higher.
"Investment Grade Status Event" has the meaning specified in
Section 4.19.
"Issue Date" means July 7, 2004, 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
(1) 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"),
(2) Indebtedness incurred under the facility agreement dated as of March 25, 2004 among Martin Maritime Ltd., Andre Maritime Ltd., certain other parties and the lenders thereunder and related instruments and other documents as in effect on the Issue Date (the "Angola/Africa Drillship Financing"),
(3) Indebtedness incurred to finance all or a part of the purchase, acquisition, renovation or construction of capital assets and related items (including interest added to principal), or renewals, extensions, refinancings, refunds, repurchases or replacements (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) thereof or of the Venezuelan Barge Financing or the Angola/Africa Drilling Financing,
- for which the recourse of the holder of such Indebtedness is effectively limited to such capital assets and related items (including the Capital Stock of Persons that own, whether directly or indirectly, such capital assets and related items and no other significant Property), or
- 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.
"Liquid Securities" means securities (1) of an issuer that is
not an Affiliate of the Company, (2) that are publicly traded on the
New York Stock Exchange, the American Stock Exchange, the Toronto Stock
Exchange, the London Stock Exchange or the Nasdaq National Market and
(3) as to which (a) the Company is not subject to any restrictions on
sale or transfer (including any volume restrictions under Rule 144 or
any other restrictions imposed by the Securities Act), (b) a
registration statement under the Securities Act covering the resale
thereof is in effect, (c) the Company or a Subsidiary is entitled to
registration rights under the Securities Act, or (d) in the case of any
securities traded on the Toronto Stock Exchange or London Stock
Exchange, the Company or a Subsidiary has rights comparable to those
referred to in subclauses (b) and (c) of this clause (3), in each case
in this clause (3) for as long as the securities are held; provided,
however, that securities meeting the requirements of clauses (1), (2)
and (3) of this definition shall be treated as Liquid Securities from
the date of receipt thereof until and only until the earlier of (x) the
date on which such securities are sold or exchanged for cash or cash
equivalents and (y) one year following the date of receipt of such
securities. If such securities are not sold or exchanged for cash or
cash equivalents within one year of receipt thereof, then, for purposes
of determining whether the transaction pursuant to which the Company or
a Subsidiary received the securities complied with the provisions of
Section 4.14, such securities shall be deemed not to have been Liquid
Securities at any time.
"Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.
"Net Available Proceeds" means
(1) as to any Asset Sale (other than a Bargain Purchase Contract) or Sale and Lease-Back Transaction, the Cash Proceeds therefrom, net of:
- all legal and title expenses, commissions and other fees and expenses incurred,
- all taxes payable as a consequence of such Asset Sale or Sale and Lease-Back Transaction,
- all payments made to any Person other than the Company or a Subsidiary on any Indebtedness (a) in accordance with the terms of any Lien upon or with respect to such Property or (b) which must, by its terms or in order to obtain a necessary consent to such Asset Sale or Sale and Lease-Back Transaction or by applicable law, be repaid out of the proceeds from such Asset Sale or Sale and Lease-Back Transaction, excluding, however, any payments of revolving
credit Indebtedness that are not accompanied by a permanent reduction of availability of revolving credit borrowings,
- with respect to any Asset Sale or Sale and Lease-Back Transaction 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),
- 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 or Sale and Lease-Back Transaction and retained by the Company or any Subsidiary, as the case may be, after such Asset Sale or Sale and Lease-Back Transaction including pension and other post- employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale or Sale and Lease-Back Transaction,
- Cash Proceeds pursuant to the first bullet point of the third paragraph of Section 4.14, and
(2) as to any Bargain Purchase Contract, an amount equal to:
- that portion of the rental or other payment stream arising under a Bargain Purchase Contract that represents an amount in excess of the Fair Market Value of the rental or other payments with respect to the pertinent Property, and
- the Cash Proceeds from the sale of such Property, net of the amounts set forth in clause (1) above, in each case as and when received.
"1999 Issue Date" means May 26, 1999, the date of original issue of the 10% Senior Notes due 2009 of the Company.
"Non-Recourse Indebtedness" means Indebtedness or that portion of Indebtedness of a Non-Recourse Subsidiary as to which neither the Company nor any Subsidiary provides credit support constituting Indebtedness of the Company or any Subsidiary or is otherwise directly or indirectly liable (other than Indebtedness permitted to be incurred under the definition of Non-Recourse Subsidiary).
"Non-Recourse Subsidiary" means:
- any subsidiary of the Company that at the time of determination will be designated a Non-Recourse Subsidiary by the Board of Directors as provided below, and
- any subsidiary of a Non-Recourse Subsidiary.
The Board of Directors may designate any subsidiary of the Company as a Non-Recourse Subsidiary so long as:
(1) neither the Company nor any Subsidiary is directly or indirectly liable pursuant to the terms of any Indebtedness of such subsidiary or has made an Investment in such subsidiary, subject to the proviso described below, and
(2) such designation does 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 is in compliance with Section 4.16).
With respect to clause (1) of this definition, however, the Company or a Subsidiary may be liable for Indebtedness of, and may have an Investment in, a Non-Recourse Subsidiary if:
- such liability or Investment constituted a Permitted Investment or a Restricted Payment permitted by Section 4.10, in each case at the time of incurrence, or
- the liability or Investment would be a Permitted Investment or a Restricted Payment permitted by Section 4.10, in each case at the time of designation of such Subsidiary as a Non-Recourse Subsidiary.
The Board of Directors may designate any Non-Recourse Subsidiary as a Subsidiary if, immediately after giving effect to such designation:
- no Default or Event of Default has occurred and is continuing,
- the Company could incur $1.00 of additional Indebtedness (not including the incurrence of Permitted Indebtedness) under Section 4.11, and
- 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 is in compliance with Section 4.16.
"Notes" has the meaning specified in the recitals to the First Supplemental Indenture, and includes Additional Notes and Exchange Notes as well as both Transfer Restricted Securities and Notes that do not constitute Transfer Restricted Securities.
"Offering Memorandum" means any offering memorandum of the Company relating to the Notes, as the same may be amended or supplemented.
"Original Indenture" has the meaning specified in the recitals to the First Supplemental Indenture.
"Parent Holding Company" means (a) from and after the time the
Common Stock is not listed on a United States or foreign national or
regional securities exchange or traded through the National Association
of Securities Dealers Automated Quotation System or similar system or
another Person succeeds to and is substituted for the Company under
this Indenture, a Person which, immediately after such time, had
substantially the same stockholders, directly or indirectly, as the
Company immediately prior to such time with holdings in substantially
the same proportion as such stockholders' holdings in the Company
immediately prior to such time, (b) from and after the sale,
conveyance, assignment, transfer, lease or other disposition of all or
substantially all of the Company's and the Subsidiaries' assets, taken
as a whole, the Company (as determined prior to the transaction) and
(c) each Wholly Owned Subsidiary of another Parent Holding Company.
"Permitted Indebtedness" means
(1) Indebtedness of the Company under the Notes (excluding any Additional Notes but including any Exchange Notes),
(2) Indebtedness of the Company or any Subsidiary incurred under one or more Credit Facilities (in addition to any such Indebtedness incurred in compliance with the Consolidated Interest Coverage Ratio under Section 4.11) in an aggregate principal amount at any one time outstanding not to exceed the greater of:
- $800 million, and
- an amount equal to 20% of the Company's Consolidated Net Tangible Assets determined as of the date of the incurrence of such Indebtedness (plus interest and fees under such Credit Facilities),
(3) Indebtedness of the Company or any Subsidiary under Interest Swap Obligations if:
- such Interest Swap Obligations are related to payment obligations on Indebtedness otherwise permitted under Section 4.11, and
- 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,
(4) Indebtedness of the Company or any Subsidiary under Currency Hedge Obligations if
- such Currency Hedge Obligations are related to payment obligations on Indebtedness otherwise permitted under Section 4.11 or to the foreign currency cash flows reasonably
expected to be generated by the Company and the Subsidiaries, and
- 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,
(5) Indebtedness of the Company or any Subsidiary outstanding on the Issue Date,
(6) any Subsidiary Guarantees or any guarantee by any Subsidiary of any other Indebtedness of the Company and any assumption of the obligations guaranteed thereby,
(7) Indebtedness of the Company to any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of the Company,
(8) Indebtedness of any Subsidiary to the Company or any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of the Company,
(9) Indebtedness of the Company in connection with a purchase of the Notes as a result of a Change in Control if:
- the aggregate principal amount of such Indebtedness does not exceed the aggregate Change in Control Purchase Price plus the related expenses of such purchase, and
- such Indebtedness has an Average Life equal to or greater than the remaining Average Life of the Notes and does not mature prior to one year following the Stated Maturity of the Notes,
(10) Indebtedness in respect of completion bonds, performance bonds, bid bonds, appeal bonds, surety bonds, bankers acceptances, letters of credit, insurance obligations or bonds and other similar bonds and obligations incurred by the Company or any Subsidiary that do not support any obligation for borrowed money, including any guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations,
(11) Permitted Refinancing Indebtedness incurred with respect to Indebtedness of the Company (excluding any Indebtedness described in clause (7) above) described in clause (1), (2), (5), (6) or (9) above, this clause (11) or the first sentence of Section 4.11,
(12) Permitted Subsidiary Refinancing Indebtedness incurred with respect to Indebtedness of any Subsidiary (excluding any Indebtedness described in
clause (8) above) described in clause (1), (2), (5), (6) or (9) above, this clause (12) or the first sentence of Section 4.11,
(13) Indebtedness of the Company or any
Subsidiary represented by Capital Lease Obligations, Indebtedness of
the Company or any Subsidiary described in clause (5) of the definition
of "Permitted Liens" and Permitted Refinancing Indebtedness and
Permitted Subsidiary Refinancing Indebtedness incurred with respect to
either of the foregoing (in addition to any such Indebtedness incurred
in compliance with the Consolidated Interest Coverage Ratio under
Section 4.11), in an aggregate principal amount that does not exceed 5%
of the Company's Consolidated Net Tangible Assets determined as of the
date of the incurrence thereof (plus imputed interest and fees with
respect to such Capital Lease Obligations and interest and fees under
such other Indebtedness), and
(14) in addition to the items referred to in clauses (1) through (13) above, Indebtedness of the Company or any Subsidiary in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness described in this clause (14) and then outstanding, will not exceed $100 million at any one time outstanding.
For purposes of determining compliance with Section 4.11, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through
(14) above, or is entitled to be incurred pursuant to the Consolidated
Interest Coverage Ratio test of Section 4.11, the Company will be
permitted to classify (or later classify or reclassify in whole or in
part in its sole discretion) such item of Indebtedness in any manner
that complies with Section 4.11. To avoid duplication in determining
the amount of Permitted Indebtedness under any clause of this
definition, guarantees of, or obligations for letters of credit
supporting, Indebtedness otherwise included in the determination of
such amount will not also be included.
"Permitted Investments" means
(1) 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 million,
(2) commercial paper issued by any corporation, if such commercial paper has credit ratings of at least "A-l" by S&P and at least "P-l" by Moody's,
(3) U.S. Government Obligations with a maturity of four years or less,
(4) repurchase obligations for instruments of the type described in clause (3) of this definition,
(5) shares of money market mutual or similar funds having assets in excess of $100 million,
(6) payroll advances in the ordinary course of business,
(7) 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 $2 million at any one time outstanding,
(8) Investments represented by proceeds from Asset Sales,
(9) 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),
(10) Investments in stock, obligations or securities received in settlement of debts owing to the Company or any Subsidiary as a result of bankruptcy or insolvency proceedings or upon the foreclosure, perfection or enforcement of any Lien in favor of the Company or any Subsidiary, in each case as to debt owing to the Company or any Subsidiary that arose in the ordinary course of business of the Company or any such Subsidiary; provided that, any stocks, obligations or securities received in settlement of debts that arose in the ordinary course of business (and received other than as a result of bankruptcy or insolvency proceedings or upon foreclosure, perfection or enforcement of any Lien) that are, within 30 days of receipt, converted into cash or cash equivalents will be treated as having been cash or cash equivalents at the time received, and
(11) other Investments having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) that, when taken together with all other Investments made pursuant to this clause (11) since the Issue Date, do not exceed 10% of the Company's Consolidated Net Tangible Assets determined as of the same date.
"Permitted Liens" means
(1) Liens in existence on the Issue Date,
(2) Liens created for the benefit of the Notes,
(3) Liens on Property of a Person existing at the time such Person is merged or consolidated with or into, or acquired by, the Company or a Subsidiary or becomes a Subsidiary (and not incurred as a result of, or in anticipation of, such transaction), if such Liens relate solely to such Property and the proceeds thereof and accessories and upgrades thereto,
(4) Liens on Property existing at the time of the acquisition thereof (and not incurred as a result of, or in anticipation of, such transaction), if such Liens relate solely to such Property and the proceeds thereof and accessories and upgrades thereto,
(5) 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, if:
- the principal amount of Indebtedness secured by such Liens does not exceed 100% of the lesser of cost or Fair Market Value of the Property so acquired or constructed (including upgrade or refurbishment) plus transaction costs related thereto,
- such Liens do not encumber any other Property of the Company or any Subsidiary (other than the proceeds thereof and improvements, accessions and upgrades thereto and the Capital Stock of Persons that own, whether directly or indirectly, principally such Property), and
- such Liens attach to such Property within 270 days of the later of commencement of commercial operations of such Property and completion of the acquisition or construction (including upgrade or refurbishment) of such Property,
(6) Liens securing Indebtedness of the Company or a Subsidiary represented by Capital Lease Obligations in an aggregate principal amount not to exceed 5% of the Company's Consolidated Net Tangible Assets determined as of the date of the incurrence of such Liens (plus imputed interest and fees with respect to such Indebtedness),
(7) Liens to secure any extension, renewal, refinancing, refunding, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements), in whole or in part, of any Indebtedness secured by Liens permitted by this definition, if 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,
(8) Liens granted by the Company to any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of the Company,
(9) Liens granted by any Subsidiary to the Company or any of its Wholly Owned Subsidiaries, but only so long as it remains a Wholly Owned Subsidiary of the Company,
(10) Liens securing Non-Recourse Indebtedness,
(11) Liens securing Indebtedness incurred under one or more Credit Facilities,
(12) Liens securing Permitted Indebtedness described in clauses (3), (4) and (10) of the definition of "Permitted Indebtedness,"
(13) rights of set-off of banks and other Persons,
(14) Liens or equitable encumbrances deemed to exist by reason of fraudulent conveyance or transfer laws or negative pledge or similar agreements to refrain from permitting Liens,
(15) Liens in existence on the occurrence of an Investment Grade Status Event,
(16) Liens in connection with any Securitization Transaction, and
(17) Liens not otherwise permitted by clauses (1) -- (16) above securing up to $100 million of other Indebtedness at any one time outstanding.
"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, repurchase or replace, outstanding Indebtedness of the Company or a Subsidiary, which outstanding Indebtedness was incurred in accordance with, or is otherwise permitted by, the terms of this Indenture, provided that:
(1) if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced is equal or subordinated in right of payment to the Notes, then such new Indebtedness is equal 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, repurchased or replaced,
(2) such new Indebtedness is scheduled to mature later than the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(3) 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, repurchased or replaced, and
(4) 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, repurchased or replaced (or if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced 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 any premium incurred by the Company or any 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, repurchase or replace, outstanding Indebtedness of such Subsidiary or any other Subsidiary, which outstanding Indebtedness was incurred in accordance with or is otherwise permitted by the terms of this Indenture, provided that:
(1) if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced is equal or subordinated in right of payment to the Subsidiary Guarantees, then such new Indebtedness is equal or subordinated, as the case may be, in right of payment (without regard to its being secured) to the Subsidiary Guarantees at least to the same extent as the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(2) such new Indebtedness is scheduled to mature later than the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced,
(3) 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, repurchased or replaced, and
(4) 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, repurchased or replaced (or if the Indebtedness being renewed, extended, refinanced, refunded, repurchased or replaced 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 any premium 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.
"Purchase Agreement" means (1) with respect to the Notes issued on the Issue Date, the Purchase Agreement dated June 22, 2004 among the Company and the Initial Purchasers and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and each Initial Purchaser purchasing such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Decline" means that, at any time within 90 days (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moody's or S&P) after the date of public notice of a Change in Control, or of public notice of the Company's intention or that of any other Person to effect a Change in Control, the rating of the Notes is decreased by both Moody's and S&P by one or more ratings categories and the Notes following such downgrade do not qualify for Investment Grade Status.
"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.
"Registration Rights Agreement" means (a) the Registration Rights Agreement among the Company and the Initial Purchasers dated the Issue Date relating to the Notes issued on such date, a form of which is attached as Appendix A to the First Supplemental Indenture, and (b) with respect to each issuance of Additional Notes issued in a transaction exempt from or not subject to the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Initial Purchasers purchasing such Additional Notes under the related Purchase Agreement, in each case as such agreement may be amended or modified from time to time.
"Regular Record Date" means each January 1 and July 1 immediately preceding an Interest Payment Date with respect to the Notes.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Security" has the meaning specified in
Section 2.02(b) of the First Supplemental Indenture.
"Related Business" means any business related, similar, ancillary or complementary to the business of the Company and its Subsidiaries on the Issue Date.
"Replacement Asset" means any Property that, as determined by the Board of Directors evidenced by a Board Resolution, is used or is useful in a Related Business.
"Resale Restriction Termination Date" means the date of expiration of the applicable holding period with respect to any Transfer Restricted Securities set forth in Rule 144(k) under the Securities Act (or any successor rule or regulations).
"Restricted Investment" means any Investment other than a Permitted Investment.
"Restricted Payment" means to
(1) 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 parent of the Company, or warrants, rights or options to acquire such Capital Stock, other than:
- 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
- dividends or distributions by a Subsidiary to the Company or to a Wholly Owned Subsidiary of the Company,
(2) 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, Subordinated Indebtedness of the Company or any Subsidiary Guarantor or
(3) make any Restricted Investment in any Person.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Security" has the meaning specified in
Section 2.02(b) of the First Supplemental Indenture.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.
"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.
"Securities Act" means the Securities Act of 1933, as amended, and any successor statute.
"Securitization Transaction" means any transaction in which
the Company or any Subsidiary sells or otherwise transfers an interest
in accounts receivable (i) to one or more third party purchasers or
(ii) to a special purpose entity (including, without limitation, a
Subsidiary) that borrows against such accounts receivable or sells such
accounts receivable (or an undivided interest therein) to one or more
third party purchasers, but only to the extent that amounts received in
connection with the sale or other transfer of such accounts receivable
would not under GAAP be accounted for as liabilities on a consolidated
balance sheet of the Company.
"Senior Debt" means any Indebtedness incurred by the Company or any Subsidiary Guarantor, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be; provided, however, Senior Debt shall not include:
(1) any liability for taxes owed or owing by the Company,
(2) any Indebtedness owing to any Subsidiaries,
(3) any obligations with respect to Capital Stock of the Company,
(4) any trade payables, or
(5) any Indebtedness that is incurred in violation of this Indenture.
"Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.
"Subordinated Indebtedness" means any Indebtedness of the Company or any Subsidiary Guarantor (other than intercompany Indebtedness) that is subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be, pursuant to a written agreement to that effect and does not mature prior to one year following the Stated Maturity of the Notes.
The term "subsidiary" means, with respect to any Person,
(1) any corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person, or by one or more other subsidiaries of such Person, or by such Person and one or more other subsidiaries of such Person,
(2) any general partnership, limited liability company, 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
(3) 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 of Article XI 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 XI hereof.
"Transaction Date" has the meaning specified in the definition of "Consolidated Interest Coverage Ratio."
"Transfer Restricted Securities" means Notes that are required to bear the restrictive legend set forth in Section 2.04 of the First Supplemental Indenture.
"U.S. Person" means a U.S. person as defined in Regulation S.
"Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock of 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, with respect to a Person, any subsidiary of that Person to the extent
(1) all of the Voting Stock of such subsidiary, other than any director's qualifying shares mandated by applicable law, is owned directly or indirectly by such Person or
(2) such subsidiary is organized in a foreign jurisdiction and is required by the applicable laws and regulations of such foreign jurisdiction to be partially owned by the government of such foreign jurisdiction or individual or corporate citizens of such foreign jurisdiction in order for such subsidiary to transact business in such foreign jurisdiction, if such Person:
- directly or indirectly owns the remaining Capital Stock of 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 1.02. Supplement to Article II of the Original Indenture. The Original Indenture is supplemented with respect to the Notes by revising the third sentence within the third full paragraph of Section 2.17 to read as follows:
Securities in certificated form shall be transferred to all beneficial
owners in exchange for their beneficial interests in a Global Security
if, and only if, either (1) the Depositary (a) notifies the Company
that it is unwilling or unable to continue as Depositary for the Global
Security representing the Notes or (b) it has ceased to be a clearing
agency registered under the Exchange Act and in either event a
successor Depositary is not appointed by the Company within 90 days or
(2) an Event of Default has occurred with respect to the Notes and is
continuing and the Trustee or the Registrar has received a request from
the Depositary to issue Securities in certificated form (in which case
the Company shall deliver Securities in certificated form within 30
days of such request).
SECTION 1.03. Supplement to Article III of the Original Indenture.
(a) New Sections 3.12 through 3.18 are hereby added to Article III of the Original Indenture, but only with respect to the Notes, as follows:
SECTION 3.12. Purchase of Notes at Option of the Holder upon Change in Control.
(a) If there shall have occurred a Change in Control resulting in a Rating Decline, the Company shall, at the option of the Holder, become obligated to repurchase the Notes held by such Holder for cash at the purchase price specified in paragraph 6 of the Notes (the "Change in Control Purchase Price") as
of the date that is 35 Business Days after the occurrence of the Change in Control (the "Change in Control Purchase Date"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in this Section 3.12.
(b) Within 15 Business Days after the Change in Control resulting in a Rating Decline, the Company shall mail a written notice of such Change in Control by first-class mail to the Trustee and to each Holder (and to beneficial owners if required by applicable law). The notice shall include a form of Change in Control Purchase Notice (substantially in the form of the Option of Holder to Elect Purchase Upon Change in Control attached to the form of Note in Exhibit A to the First Supplemental Indenture) to be completed by the Holder and shall state:
(1) briefly, the events causing a Change in Control and the date such Change in Control is deemed to have occurred for purposes of this Section 3.12;
(2) the date by which the Change in Control Purchase Notice pursuant to this Section 3.12 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent;
(6) that Notes must be surrendered to the Paying Agent to collect payment;
(7) that the Change in Control Purchase Price for any Note as to which a Change in Control Purchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Change in Control Purchase Date and the time of surrender of such Note as described in clause (6) above;
(8) any other procedures the Holder must follow to exercise rights under this Section 3.12 and a brief description of those rights; and
(9) the procedures for withdrawing a Change in Control Purchase Notice.
(c) A Holder may exercise its rights specified in Section 3.12(a) upon delivery of a written notice of purchase (a "Change in Control Purchase Notice") to the Paying Agent at any time prior to the close of business on the Change in Control Purchase Date, stating:
(1) the certificate number of any Note in certificated form which the Holder will deliver to be purchased;
(2) the portion of the principal amount of each Note which the Holder will deliver to be purchased, which portion must be $1,000 or an integral multiple thereof; and
(3) that such Note shall be purchased as of the Change in Control Purchase Date pursuant to the terms and conditions specified in paragraph 6 of the Notes and in this Indenture.
Receipt of the Note, prior to, on or after the Change in
Control Purchase Date (together with all necessary endorsements), by
the Paying Agent shall be a condition to the receipt by the Holder of
the Change in Control Purchase Price therefor; provided, however, that
such Change in Control Purchase Price shall be so paid pursuant to this
Section 3.12 only if each Note so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this Section 3.12, a portion of a Note if the principal amount of such portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to the purchase of all of a Note also apply to the purchase of such portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of this Section 3.12 shall be consummated by the payment of cash to the Holder according to the second sentence of the first paragraph of Section 3.13.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this Section 3.12(c) shall have the right to withdraw
such Change in Control Purchase Notice at any time prior to the close
of business on the Change in Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with
Section 3.13.
The Paying Agent shall promptly notify the Company of the receipt by it of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 3.13. Effect of Change in Control Purchase Notice.
Upon receipt by the Paying Agent of the Change in Control Purchase Notice according to Section 3.12, the Holder of the Note in respect of which such Change in Control Purchase Notice was given shall (unless such Change in Control Purchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Change in Control Purchase Price with respect to such Note. Such Change in Control Purchase Price shall be paid to such Holder promptly following the later of (x) the Business Day following the Change in Control Purchase Date with respect to such Note and (y) the time of delivery of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.12.
A Change in Control Purchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Paying Agent at any time prior to the close of business on the Change in Control Purchase Date, specifying:
(1) the certificate number of the Note in certificated form in respect of which such notice of withdrawal is being submitted;
(2) the principal amount of the Note with respect to which such notice of withdrawal is being submitted; and
(3) the principal amount, if any, of such Note (which must be $1,000 or an integral multiple thereof) which remains subject to the original Change in Control Purchase Notice and which has been or will be delivered for purchase by the Company.
There shall be no purchase of any Notes pursuant to Section 3.12 if there has occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Notes, of the required Change in Control Purchase Notice) and is continuing an Event of Default (other than a default in the payment of the Change in Control Purchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Notes (x) with respect to which a Change in Control Purchase Notice has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment of the Change in Control Purchase Price with respect to such Notes) in which case, upon such return, the Change in Control Purchase Notice with respect thereto shall be deemed to have been withdrawn.
SECTION 3.14. Deposit of Change in Control Purchase Price.
By 11:00 a.m., New York City time, on the Business Day following the Change in Control Purchase Date, the Company shall deposit with the Paying Agent (or, if the Company is acting as Paying Agent, shall segregate and hold in trust as provided in Section 2.06) an amount of cash in immediately available funds sufficient to pay the aggregate Change in Control Purchase Price of all the Notes or portions thereof which are to be purchased as of the Change in Control Purchase Date.
SECTION 3.15. Notes Purchased in Part.
Any Note which is to be purchased under Section 3.12 only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement, or a written instrument of transfer in form satisfactory to the Company and the Trustee executed by the Holder or such Holder's attorney duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Note so surrendered which is not purchased.
SECTION 3.16. Covenant to Comply with Securities Laws upon Purchase of Notes.
In connection with any offer to purchase or purchase of Notes under Section 3.12, the Company shall (i) comply with the provisions of the Exchange Act that may then be applicable, and (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, if required.
SECTION 3.17. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company, upon written request, any cash, together with interest on such cash as hereinafter provided (subject to the provisions of Section 7.01(b)), held by them for the payment of a Change in Control Purchase Price or Redemption Price that remains unclaimed as provided in Section 8.03, provided, however, that to the extent that the aggregate amount of cash so deposited by the Company exceeds the aggregate Change in Control Purchase Price or Redemption Price, respectively, of the Notes or portions thereof to be purchased or redeemed, then promptly after the Business Day following the Change in Control Purchase Date or Redemption Date, as the case may be, the Trustee or the Paying Agent, as the case may be, shall return any such excess to the Company together with interest on any cash as hereinafter provided (subject to the provisions of Section 7.01(b)). Any cash deposited with the Trustee or with the Paying Agent pursuant to this Article III shall be invested by the Trustee or Paying Agent, as applicable, in short-term obligations of, or fully guaranteed by, the United States of America, or commercial paper rated A-1 or better by S&P or P-1 or better by Moody's as specifically directed in writing by the Company. Interest earned on such investments shall be repaid to the Company pursuant to this Section 3.17. Except as provided for in this Section 3.17, neither the Paying Agent nor the Trustee shall be under any liability for interest on any money received by it pursuant to this Indenture.
SECTION 3.18. Outstanding Notes.
If the Paying Agent holds, in accordance with this Indenture, by 11:00 a.m., New York City time, on the Business Day following a Change in Control Purchase Date, money sufficient to pay the Change in Control Purchase Price of the Notes to be purchased as of the Change in Control Purchase Date, then (i) the Change in Control Purchase Price for such Notes shall be deemed paid and (ii) after such Change in Control Purchase Date, such Notes shall cease to be outstanding, interest on such Notes shall cease to accrue and all other rights of the Holder shall terminate (other than the right to receive the Change in Control Purchase Price upon delivery of the Note in accordance with the terms of this Indenture), whether or not such Notes are delivered to the Paying Agent.
SECTION 1.04. Supplement to Article IV of the Original Indenture.
(a) Article IV of the Original Indenture is supplemented with respect to the Notes by inserting the following new Sections at the end thereof:
SECTION 4.08. [Reserved].
SECTION 4.09. Transactions with Affiliates.
The Company shall, and shall permit any Subsidiary to, conduct any business or enter into any transaction or series of related transactions, including 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 of the Company's Affiliates (other than transactions among the Company and any of its Wholly Owned Subsidiaries or among its Wholly Owned Subsidiaries) only if:
(1) the transaction or series of related transactions is on terms which are no less favorable in all material respects to the Company or the Subsidiary than those that could be obtained in a comparable arm's length transaction with a Person that is not such an Affiliate, and
(2) if the transaction or series of related transactions has a Fair Market Value:
- in excess of $10 million per year but less than $25 million per year, the Company certifies to the Trustee that the transaction or series of related transactions complies with clause (1) of this Section 4.09, or
- in excess of $25 million per year, then:
(a) the transaction or series of related transactions
is approved by a majority of the Board of Directors, including
a majority of the disinterested directors, which approval is
evidenced by a Board Resolution that the transaction or series
of related transactions complies with clause (1) of this
Section 4.09, or
(b) the Company receives a favorable opinion from a nationally recognized investment banking or similar firm of its choice (having expertise in the specific area which is the subject of the opinion) that the payments to be made are fair consideration for the transaction or series of related transactions.
The preceding sentence of this Section 4.09 shall not apply to the following:
- sales by the Company of its Common Stock to any of its Affiliates,
- reasonable compensation (including amounts paid pursuant to employee benefit plans) and indemnification paid or made available to an officer, director or employee of the Company or a Subsidiary for services rendered in that person's capacity as an officer, director or employee, or
- the making of any Restricted Payment otherwise permitted by this Indenture.
SECTION 4.10. Limitation on Restricted Payments.
The Company shall, and shall permit any Subsidiary to, make any Restricted Payment only if, at the time of and after giving effect to the proposed Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would result from the Restricted Payment,
(2) the Company could incur at least $1.00 of additional Indebtedness under the Consolidated Interest Coverage Ratio test described in the first sentence of Section 4.11, and
(3) the aggregate amount of such Restricted Payment and all Restricted Payments (the amount of any Restricted Payment not made in cash shall be based on Fair Market Value) declared or made on or after the 1999 Issue Date by the Company or any Subsidiary does not exceed the sum of:
- 50% of the Company's aggregate Consolidated Net Income accrued during the period beginning on April 1, 1999 and ending on the last day of the fiscal quarter ending immediately prior to the date of such proposed Restricted Payment (or if such Consolidated Net Income is a deficit, minus 100% of the deficit), plus
- an amount equal to (a) the aggregate net cash proceeds and the Fair Market Value of securities or other Property other than cash the Company has received, after the 1999 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 the Capital Stock issued upon the exercise of options, warrants or rights to purchase its Capital Stock (other than Redeemable Stock) and (b) the liability (expressed as a positive number) in accordance with GAAP for any of its Indebtedness or carrying value of Redeemable Stock that has been issued after the 1999 Issue Date and converted into, exchanged for or satisfied by the issuance of shares of its Capital Stock (other than Redeemable Stock) after the 1999 Issue Date, plus
- to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Non-Recourse Subsidiaries or joint ventures or other Persons resulting from dividends, repayments of loans or advances, releases or discharges of guarantees or other obligations or other transfers of Property or return of capital, in each case to or in favor of the Company or a Subsidiary after the 1999 Issue Date from any Non-Recourse Subsidiary or joint venture or other Person 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 or other Person, the total amount of Investments (other than Permitted Investments permitted by clauses (1)-(10) of the definition of "Permitted Investments") in such Non-Recourse Subsidiary or joint venture or other Person made by the Company and its Subsidiaries in such Non-Recourse Subsidiary or joint venture or other Person existing on or made after the 1999 Issue Date, plus
- to the extent not otherwise included in the Company's Consolidated Net Income or in the previous bullet point, the total amount of Investments existing on or made after the 1999 Issue Date in Persons which have become Subsidiaries subsequent to the 1999 Issue Date (calculated as of the date they become Subsidiaries), plus
- $50 million.
The preceding sentence of this Section 4.10 shall not prevent:
(A) the payment of any dividend on the Capital Stock of any class within 60 days after the date of its declaration if at the date of declaration the payment would be permitted by this Indenture, provided that at the time of the declaration of such dividend, no Default shall have occurred and be continuing,
(B) any repurchase or redemption of the Company's Capital Stock or Subordinated Indebtedness made by exchange for its Capital Stock (other than Redeemable Stock), or out of the net cash proceeds from the substantially concurrent issuance or sale (other than to a Subsidiary) of its Capital Stock (other than Redeemable Stock), if the net cash proceeds from the sale are excluded from computations under the second bullet point under (3) 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 solely in exchange for, or out of the net cash proceeds from the substantially concurrent sale of, new Subordinated Indebtedness, so long as the new Subordinated Indebtedness:
- is subordinated to the Notes or the Subsidiary Guarantees, as the case may be, at least to the same extent as the Subordinated Indebtedness so exchanged, purchased or redeemed,
- has a stated maturity later than the stated maturity of the Subordinated Indebtedness so exchanged, purchased or redeemed, and
- has an Average Life at the time incurred that is greater than the remaining Average Life of the Subordinated Indebtedness so exchanged, purchased or redeemed.
Restricted Payments permitted to be made as described in clauses (B) and (C) of the immediately preceding sentence shall be excluded in calculating the amount of Restricted Payments thereafter; however, Restricted Payments made as described in (A) of the immediately preceding sentence shall be included.
SECTION 4.11. Limitation on Indebtedness.
The Company shall, and shall permit any Subsidiary to, create, incur, assume, suffer to come into existence, guarantee or otherwise become liable with respect to the payment of (collectively, "incur") any Indebtedness only if, after giving effect to the incurrence of that Indebtedness, no Default or Event of Default would occur and the Consolidated Interest Coverage Ratio for the Determination Period preceding the applicable Transaction Date is at least 2.0 to 1.0. Notwithstanding the foregoing, the Company or any Subsidiary may incur Permitted Indebtedness. Any Indebtedness of a Person existing at the time that Person becomes a Subsidiary (or is consolidated or merged with or into a Subsidiary or the Company) shall be deemed to be incurred at the time such Person becomes a Subsidiary (or the merger or consolidation occurs).
SECTION 4.12. Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to, 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 that by its terms restricts the ability of any Subsidiary to:
- pay dividends or make any other distributions on its Capital Stock to the Company or any Subsidiary,
- pay any Indebtedness owed to the Company or any Subsidiary,
- make loans or advances to the Company or any Subsidiary, or
- transfer any of its Property to the Company or any Subsidiary.
The preceding sentence of this Section 4.12 shall not apply to any encumbrance or restriction contained in any agreement or instrument:
(1) existing on the Issue Date,
(2) relating to any Property acquired after the Issue Date, so long as the encumbrance or restriction relates only to the Property so acquired,
(3) relating to any Indebtedness of any Person at the date on which the Person was merged or consolidated with or into, or acquired by, the Company or a Subsidiary or became a Subsidiary (other than Indebtedness incurred as a result of, or in anticipation of, such transaction),
(4) effecting a renewal, extension, refinancing, refund, repurchase or replacement (or successive extensions, renewals, refinancings, refundings, repurchases or replacements) of Indebtedness issued under an agreement referred to in clauses (1) through (3) of this Section 4.12, so long as the encumbrances and restrictions contained in any such renewal, extension, refinancing, refund, repurchase or replacement agreement, taken as a whole, are not materially more restrictive than the encumbrances and restrictions contained in the original agreement, as determined in good faith by the Board of Directors,
(5) constituting 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,
(6) constituting restrictions on the sale or other disposition of any Property securing Indebtedness as a result of a Permitted Lien on such Property,
(7) constituting any temporary encumbrance or restriction 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 assets of such Subsidiary, provided that such sale or disposition is otherwise permitted under this Indenture,
(8) constituting customary restrictions on cash, other deposits or assets imposed by customers and other Persons under contracts entered into in the ordinary course of business,
(9) constituting 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,
(10) relating to Limited Recourse Indebtedness,
(11) constituting a requirement that a certain amount of Indebtedness be maintained between a Subsidiary and the Company or another Subsidiary,
(12) constituting any encumbrance or restriction with respect to Property under an agreement that has been entered into for the sale or disposition of such Property, provided that such sale or disposition is otherwise permitted under this Indenture,
(13) relating to a Person existing at the time that Person is merged or consolidated with or into, or acquired by, the Company or a Subsidiary or becomes a Subsidiary (and not entered into as a result of, or in anticipation of, such transaction),
(14) constituting any encumbrance or restriction with respect to Property under a charter, lease or other agreement that has been entered into in the ordinary course of business for the employment of such Property, or
(15) in the case of Subsidiaries that are not Wholly Owned Subsidiaries, constituting a shareholders or other similar agreement.
SECTION 4.13. 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 4.14. Limitation on Asset Sales.
The Company shall engage in, and shall permit any Subsidiary to engage in, any Asset Sale only if:
(1) the Company or the Subsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale, except in the case of:
- an Asset Sale resulting from the requisition of title to, seizure or forfeiture of any Property or any actual or constructive total loss or an agreed or compromised total loss, or
- a Bargain Purchase Contract,
(2) the Fair Market Value of all forms of consideration other than Cash Proceeds, Liquid Securities, Replacement Assets and Investments permitted by Section 4.10 received for all Asset Sales (excluding those described in the two bullet points in clause (1) of this Section 4.14) since the Issue Date does not
exceed in the aggregate 10% of the Company's Consolidated Net Tangible Assets at the time of such Asset Sale (before giving effect thereto), and
(3) the Company certifies to the Trustee that such Asset Sale complies with clauses (1) and (2) of this Section 4.14.
The Company or such Subsidiary, as the case may be, may apply the Net Available Proceeds from each Asset Sale:
- to the acquisition of one or more Replacement Assets, or
- to repurchase or repay Senior Debt (other than Indebtedness owed to the Company or its Affiliates) (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 shall be deemed to be cash or cash
equivalents (and included in Cash Proceeds) for purposes of this
Section 4.14:
- any liabilities of the Company or any Subsidiary (as 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 Property, and
- 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 180 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 shall constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $50 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 holders of other Indebtedness 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 this Section 4.14, which is herein referred to as 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 an offer price in cash equal to 100% of the outstanding principal amount thereof plus any accrued and unpaid interest through and including the purchase date (subject to the right of Holders on a Regular Record
Date to receive interest due on the relevant Interest Payment Date). Upon completion of any 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, it shall send a written notice to Holders, accompanied by such information that the Company in good faith believes will enable Holders to make an informed decision with respect to the Asset Sale Offer.
The Company shall comply with any applicable tender offer rules, including any applicable requirements of Rule 14e-l under the Exchange Act, in the event that an Asset Sale Offer is required under the circumstances described in this Section 4.14, and it shall file Schedule TO or any other required schedule.
SECTION 4.15. Limitation on Sale and Lease-Back Transactions.
The Company shall, and shall permit any Subsidiary to, enter into, assume, guarantee or otherwise become liable with respect to any Sale and Lease-Back Transaction only if:
- the proceeds from the Sale and Lease-Back Transaction are at least equal to the Fair Market Value of the Property being transferred, and
- the Company or the Subsidiary would have been permitted to enter into the transaction under Section 4.11 (prior to an Investment Grade Status Event only) and Section 4.16 (in each case, if the Sale and Lease-Back Transaction is a Capital Lease Obligation).
The preceding sentence of this Section 4.15 shall not apply to any Sale and Lease-Back Transaction if:
(1) the transaction is for a period, including renewal rights, not in excess of three years;
(2) the sale of the Property that is the subject of the Sale and Lease-Back Transaction is made within 270 days after its acquisition, construction or improvement;
(3) the transaction is between the Company and a Subsidiary or between Subsidiaries; or
(4) the Company or a Subsidiary, as the case may be, applies the Net Available Proceeds from the transaction to the acquisition of one or more Replacement Assets or to repurchase or repay Senior Debt (other than Indebtedness owed to the Company or its Affiliates) (with a permanent reduction of availability in the case of revolving credit borrowings), all in accordance with
the covenant set forth in Section 4.14 as if such covenant applied to the transaction.
SECTION 4.16. Limitation on Liens.
The Company shall not, and shall not permit any Subsidiary to, create, incur, assume or suffer to come into existence any Liens on or with respect to any Property of the Company or that Subsidiary or any interest in that Property or any income or profits from that Property to secure (a) any Indebtedness of the Company or a Subsidiary (if it is not also a Subsidiary Guarantor), unless prior to, or contemporaneously therewith, the Notes are equally and ratably secured, or (b) any Indebtedness of any Subsidiary Guarantor unless prior to, or contemporaneously therewith, the Subsidiary Guarantees are equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the Notes or the Subsidiary Guarantees, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or the Subsidiary Guarantees, as the case may be, with the same relative priority as such Indebtedness has with respect to the Notes or the Subsidiary Guarantees. The preceding sentence of this Section 4.16 shall not apply to Permitted Liens.
SECTION 4.17. Limitation on Non-Guarantor Subsidiaries.
The Company shall permit any Subsidiary that is not a Subsidiary Guarantor to incur a guarantee of any Indebtedness of the Company (except Indebtedness under a Credit Facility) only if:
(1) both
- such Subsidiary simultaneously executes and delivers a supplement to this Indenture, substantially in the form of Exhibit B to the First Supplemental Indenture, providing for a Subsidiary Guarantee, and
- with respect to any guarantee of the Company's Subordinated Indebtedness by a Subsidiary, any such guarantee shall be subordinated to that Subsidiary's Subsidiary Guarantee at least to the same extent as such Subordinated Indebtedness is subordinated to the Notes,
(2) 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
(3) such Subsidiary delivers to the Trustee an Opinion of Counsel of outside legal counsel to the effect that such supplemental indenture has been duly executed and authorized and that such Subsidiary Guarantee constitutes a valid,
binding and enforceable obligation of the Subsidiary, except insofar as enforcement thereof may be:
- limited by bankruptcy, insolvency or similar laws (including all laws relating to fraudulent transfers), and
- subject to general principles of equity.
This Section 4.17 shall not, however, apply to any guarantee of any Subsidiary that:
- existed at the time such Person became a Subsidiary, and
- was not incurred in connection with, or in contemplation of, that Person becoming a Subsidiary.
A pledge of assets to secure any Indebtedness for which the pledgor is not otherwise liable shall not be considered a guarantee for purposes of this Section 4.17.
SECTION 4.18. Reports.
So long as any Notes are outstanding, the Company shall: (1) file with the SEC, so long as it accepts the Company's filings and whether or not the Company is required to do so under the Exchange Act, the annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that the Company would be required to file if it were subject to Section 13 or 15 of the Exchange Act, in each case on or before the dates on which such reports would have been required to have been filed with the SEC if the Company had been subject to Section 13 or 15 of the Exchange Act; and (2) file with the Trustee (with exhibits) copies of such reports within 15 days after the date on which the Company files the reports with the SEC or the date on which the Company would be required to file the reports if it were so required or, if the SEC will not accept the filings, supply copies of the reports (including any exhibits) to any Holder promptly upon written request.
Section 4.03(c) shall be applicable with respect to filings made by the Company in accordance with this Section 4.18, and references in Section 4.03(c) to Section 4.03(a) and Section 4.03 shall be deemed also to include references to this Section 4.18.
SECTION 4.19. Termination of Certain Covenants Upon Investment Grade Status Event.
If at any time the Notes shall achieve an Investment Grade Status and no Event of Default shall have occurred and then be continuing (such occurrence being referred to as an "Investment Grade Status Event"), then, immediately upon the Company's delivery to the Trustee of an Officers' Certificate certifying the
occurrence of an Investment Grade Status Event, the covenants set forth in Sections 4.09 through 4.14, together with clause (3) of Section 5.01, shall terminate and shall not thereafter be applicable to the Company and its Subsidiaries.
SECTION 1.05. Supplement to Article V of the Original Indenture.
Section 5.01 of the Original Indenture is superseded with respect to the Notes
by the following provisions:
The Company shall not consolidate with or merge into any other Person, or sell, lease, convey, assign, transfer or otherwise dispose of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person, unless:
(1) either (a) the Company shall be the continuing Person or (b) the Person (if other than the Company) formed by such consolidation or surviving such merger or which acquires, by sale, lease, conveyance, assignment, transfer or other disposition, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole (such Person, the "Successor"), shall be a Person organized and validly existing under the laws of the United States of America, 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, any other member of the European Union or the Netherlands Antilles and shall expressly assume, by a supplement to this Indenture, the due and punctual payment of all amounts owing on all the Notes and the performance of the Company's covenants and obligations under this Indenture;
(2) immediately after giving effect to such transaction 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), no Event of Default or Default shall have occurred and be continuing or would result therefrom;
(3) immediately after giving effect to the transaction on a pro forma basis as if the transaction had occurred on the first day of the Determination Period, the Company or the Successor would: (a) be permitted to incur $1.00 of additional Indebtedness under the Consolidated Interest Coverage Ratio test described in the first sentence of Section 4.11 or (b) have a Consolidated Interest Coverage Ratio that is no less than such ratio for the Company immediately prior to the transaction, in which event the Company shall be deemed to have complied with the test described in the first sentence of Section 4.11;
(4) in the case of clause (1)(b) of this Section 5.01, in the event that the Successor is organized in a jurisdiction other than the United States of America, any State thereof or the District of Columbia that is different from the jurisdiction in which the obligor on the Notes was organized immediately before giving effect to the transaction, (a) such Successor delivers to the Trustee an Opinion of Counsel stating that (1) the obligations of the Successor 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) such Successor agrees in writing to submit to jurisdiction to the competent courts of the State of New York or the federal district court sitting in The City of New York and appoints an agent in the State of New York for the service of process, each under terms satisfactory to the Trustee, and (c) the Board of Directors or the comparable governing body of such Successor determines in good faith that such transaction will not adversely affect the interests of the Holders of Notes in any material respect and a Board Resolution (or its equivalent if the Successor is not a corporation) to that effect is delivered to the Trustee; and
(5) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, lease, conveyance, assignment, transfer or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Indenture and that all conditions precedent herein provided for relating to such transaction have been complied with.
The preceding provisions of this Section 5.01 shall not apply to any merger of another Person into the Company. In addition, the provision described in clause (3) of this Section 5.01 shall not apply to any merger into, or consolidation with, or any disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to, the Company or any of its Wholly Owned Subsidiaries.
SECTION 1.06. Supplement to Article VI of the Original Indenture.
(a) Section 6.01 of the Original Indenture is supplemented with
respect to the Notes by deleting clauses (3), (5) and (6) thereof, by
substituting for such deleted clauses the new clauses (3), (5) and (6) set forth
below and by adding the following new clauses (7)-(9) thereto in lieu of clause
(7) thereof:
(3) the Company fails to comply with any of its covenants
or agreements contained in Sections 3.12 and 3.14, Section 4.14 or
Section 5.01 hereof;
...
(5) the Company or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:
(A) is for relief against the Company or any of its Significant Subsidiaries as debtor in an involuntary case,
(B) appoints a Bankruptcy Custodian of the Company or any of its Significant Subsidiaries or a Bankruptcy Custodian for all or substantially all of the property of the Company or any of its Significant Subsidiaries; or
(C) orders the liquidation of the Company or any of its Significant Subsidiaries.
(7) Indebtedness (other than Limited Recourse Indebtedness) of the Company or any Subsidiary 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 $50 million;
(8) a court of competent jurisdiction enters one or more judgments or orders against the Company or any Subsidiary in an uninsured or unindemnified aggregate amount in excess of $50 million that remain undischarged or unsatisfied for 60 consecutive days after the right to appeal them has expired; or
(9) 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 last paragraph of Section 6.01 of the Original Indenture is supplemented with respect to the Notes by deleting the words "or (7)" in the first sentence thereof.
(c) The first sentence of Section 6.05 of the Original Indenture
is supplemented with respect to the Notes by substituting the phrase "(1), (2),
(3), (7), (8) or (9)" for the phrase "(1), (2), (3) or (7)" appearing therein.
SECTION 1.07. Supplement to Article VIII of the Original Identure.
The Original Indenture is supplemented with respect to the Notes by inserting the following provision in Article VIII:
SECTION 8.05. Discharge of Subsidiary Guarantees.
The obligations of each Subsidiary Guarantor with respect to its Subsidiary Guarantee and under this Indenture shall be satisfied, discharged and/or defeased automatically to the same extent as the obligations of the Company with respect to the Notes are satisfied, discharged and/or defeased pursuant to this Article VIII (in addition to any release or discharge pursuant to Section 11.04), and such obligations of each Subsidiary Guarantor so satisfied, discharged and/or defeased shall be subject to reinstatement pursuant to Section 8.04 in the event that such obligations of the Company shall be reinstated (unless released or discharged pursuant to Section 11.04).
SECTION 1.08. Supplement to Article IX of the Original Indenture.
(a) Section 9.01 of the Original Indenture is supplemented with respect to the Notes by inserting the following proviso at the end of clause (8) thereof: "; and provided further, however, that any such change or elimination to conform this Indenture to an Offering Memorandum shall not be deemed to so adversely affect the Notes."
(b) Section 9.02 of the Original Indenture is
supplemented with respect to the Notes by deleting the word "or" at the
end of clause (9) thereof, replacing the period at the end of clause
(10) thereof with a semi-colon, and adding the following new clauses
(11) and (12) to such Section:
(11) subordinate in right of payment, or otherwise subordinate, the Notes or any Subsidiary Guarantee to any other Indebtedness; or
(12) materially and adversely affect the right provided in Article III to require the Company to repurchase Notes upon a Change in Control resulting in a Rating Decline.
SECTION 1.09. New Article XI.
The Original Indenture is supplemented with respect to the Notes by inserting the following Article XI:
ARTICLE XI
SUBSIDIARY GUARANTEES
SECTION 11.01. Subsidiary Guarantees.
Each Subsidiary Guarantor, jointly and severally, hereby unconditionally guarantees 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 any premium and interest on the Notes shall be promptly paid in full when due, whether at Stated
Maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on premium and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder shall be promptly paid
in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same shall be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors shall be jointly and severally obligated to pay
the same immediately. The Subsidiary Guarantors hereby agree that their
obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by
any Holder with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and
covenants that this Subsidiary Guarantee shall not be discharged (other
than in accordance with Section 8.01(a), 8.01(c) or 11.04 of this
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 VI 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 VI, 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 11.01.
SECTION 11.02. Execution and Delivery of Supplemental Indentures.
To effect its Subsidiary Guarantee set forth in Section 11.01, each Subsidiary Guarantor hereby agrees that a supplement to this Indenture shall be executed on behalf of such Subsidiary Guarantor by its duly authorized officer in accordance with Section 4.17 hereof and that such Subsidiary Guarantor shall deliver to the Trustee the Opinion of Counsel required by Section 4.17 hereof.
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 11.03. 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 11.04 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) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation or merger 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.
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 Person shall succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor.
Except as set forth in Articles IV and V 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 another Subsidiary Guarantor, or shall prevent any sale or other disposition of all or substantially all of the assets of a Subsidiary Guarantor to the Company or another Subsidiary Guarantor.
SECTION 11.04. Releases of Subsidiary Guarantees.
In the event of (1) a sale or other disposition of all or substantially all of the assets of any Subsidiary Guarantor to a Person other than a Subsidiary or the Company in a transaction that does not violate any provisions of this Indenture, by way of merger, consolidation or otherwise, or (2) a sale or other disposition (including, without limitation, by foreclosure) of all of the Capital Stock of any Subsidiary Guarantor to a Person other than a Subsidiary or the Company, then such Subsidiary Guarantor shall be released and relieved of any obligations under this Indenture and its Subsidiary Guarantee; provided that all obligations of such Subsidiary Guarantor under all of its guarantees of any other Indebtedness of the Company shall also terminate or be released upon such sale or other disposition. 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 in accordance with the provisions of this Indenture, 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 and Indebtedness of the Company under any Credit Facility), such Subsidiary Guarantor shall, upon the written request of the Company to the Trustee, 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 (other than the Notes and Indebtedness of the Company under any Credit Facility), 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 that is designated a Non-Recourse Subsidiary in accordance with the terms of this Indenture shall be released from and relieved of its obligations under this Indenture and its Subsidiary Guarantee. Upon effectiveness of such designation, 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 any premium and interest on the Notes and for the other obligations of any Subsidiary Guarantor under this Indenture.
SECTION 11.05. 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 Bankruptcy Act 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 1.10. Effect of Article 1. The supplements to the Original Indenture set forth in Article 1 of this First Supplemental Indenture affect only the provisions of the Original Indenture as such provisions relate to the Notes, the series of Securities comprised of the Notes and the rights, remedies and obligations of the Company, the 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.
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Terms. The Notes shall be issued initially in the form of one or more Global Securities substantially in the form set forth on Exhibit A hereto, 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. The Notes constituting Transfer Restricted Securities will be resold initially only (a) to QIBs in reliance on Rule 144A and (b) in offshore transactions to Persons other than U.S. Persons in reliance on Regulation S. Pursuant to the terms of a Registration Rights Agreement, upon consummation of the Exchange Offer contemplated thereby, the Notes constituting
Transfer Restricted Securities will be exchanged by the Holders for Exchange Notes to be issued by the Company in accordance with Section 2.03 hereof.
SECTION 2.02. Designation, Amount, etc.
(a) The Notes shall be entitled the "7 3/8% Senior Notes due 2014" of the Company.
(b) The Trustee shall authenticate and deliver Notes for original
issue on the Issue Date in an aggregate principal amount of $500,000,000 upon a
Company Order for the authentication and delivery of Notes, without any further
action by the Company, with Notes initially resold in reliance upon Rule 144A
and Regulation S being represented by separate Global Securities, which are
referred to in this Article 2 as the "Rule 144A Global Security" and the
"Regulation S Global Security," respectively. Subject to its compliance with
Section 4.11 of the Indenture, if then applicable, the Company may, from time to
time, issue for sale to one or more Initial Purchasers an unlimited amount of
additional Notes ("Additional Notes") under the Indenture, which shall be issued
in the same form as the Notes issued on the Issue Date and which shall have
identical terms as the Notes issued on the Issue Date other than with respect to
the issue date, issue price and date of first payment of interest; provided,
however, that no Additional Notes may be issued at a price that would cause such
Additional Notes to have "original issue discount" within the meaning of the
Code. The Company Order delivered by the Company to the Trustee pursuant to
Section 2.04 of the Original Indenture for the authentication and delivery of
any Additional Notes shall specify whether or not such Additional Notes shall be
Transfer Restricted Securities. The Notes issued on the Issue Date and any
Additional Notes subsequently issued, together with any Exchange Notes issued in
exchange therefor pursuant to an Exchange Offer, shall be treated as a single
series for all purposes under the Indenture, including, without limitation,
waivers, amendments, redemptions and offers to purchase.
(c) If the Company issues additional Transfer Restricted Securities prior to the completion of an Exchange Offer, the period of the resale restrictions applicable to any Transfer Restricted Securities previously offered and sold in reliance on Rule 144A will be automatically extended to the last day of the period of any resale restrictions imposed on any such additional Transfer Restricted Securities.
(d) At all times while the Notes are outstanding, the Company shall maintain a Place of Payment for the Notes in The City of New York, which Place of Payment shall be initially the office of the Trustee located at 4 New York Plaza, 15th Floor, New York, New York.
(e) The Holders shall be entitled to the benefits of Section 4.03(b) of the Original Indenture applicable to Rule 144A Securities.
(f) No Additional Amounts shall be payable with respect to the Notes.
SECTION 2.03. Transfer of Transfer Restricted Securities.
(a) When Notes are presented to the Registrar with the request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange in accordance with Article II of the Original Indenture. In addition, in the case of Transfer
Restricted Securities in certificated form, such request to register the transfer or to make the exchange shall be accompanied by the following additional information and documents, as applicable, upon which the Registrar may conclusively rely:
(1) if such Transfer Restricted Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect in substantially the form of Exhibit C hereto; or
(2) if such Transfer Restricted Securities are being transferred (i) to a QIB in accordance with Rule 144A under the Securities Act or (ii) pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act (and based upon an opinion of counsel if the Company or the Trustee so requests), a certification to that effect from such Holder in substantially the form of Exhibit C hereto; or
(3) if such Transfer Restricted Securities are being transferred to Persons other than U.S. Persons in reliance on Regulation S, a certification to that effect from such Holder in substantially the form of Exhibit D hereto; or
(4) if such Transfer Restricted Securities are being transferred in reliance on another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company or the Trustee so requests), a certification to that effect from such Holder in substantially the form of Exhibit C hereto.
(b) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act:
(1) in the case of any Transfer Restricted Security that is in the form of a certificated Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a certificated Note that does not bear the legend set forth in Section 2.04 below and rescind any restriction on the transfer of such Transfer Restricted Security set forth in this Section 2.03; and
(2) in the case of any Transfer Restricted Security represented by a Global Security, such Transfer Restricted Security shall not be required to bear the legend set forth in Section 2.04 below if all other interests in such Global Security have been or are concurrently being sold or transferred pursuant to Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act.
Notwithstanding the foregoing, upon consummation of an Exchange Offer, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.04 of the Original Indenture, the Trustee shall authenticate Exchange Notes in exchange for other Notes accepted for exchange in the Exchange Offer, which Exchange Notes shall not bear the legend set forth in Section 2.04 below, and the Registrar shall rescind any restriction on the transfer of such Exchange Notes set forth in this Section 2.03, in each case unless the Holder of such Notes accepted for exchange in the Exchange Offer (1) is an affiliate of the Company within the meaning of Rule 405 under the Securities Act or an Initial Purchaser holding Notes acquired by it and having the status of an unsold allotment in the initial offering and sale of Notes pursuant to
the Purchase Agreement, (2) does not acquire the Exchange Notes in the ordinary course of such Holder's business or (3) has an arrangement or understanding with any Person to participate in the Exchange Offer for the purpose of distributing such Exchange Notes or is engaged in, and intends to engage in, any such distribution. The Company shall identify to the Trustee such Holders of the Notes in a written certification signed by an Officer of the Company and, absent certification from the Company to such effect, the Trustee shall assume that there are no such Holders.
(c) Until the 40th day after the later of the commencement of the offering of the Notes and the Issue Date (such period, the "Distribution Compliance Period"), a beneficial interest in a Regulation S Global Note may be transferred to a Person who takes delivery in the form of an interest in a Rule 144A Global Note only if the transferor first delivers to the Trustee a written certificate (in the form provided in Exhibit C hereto) to the effect that such transfer is being made to a Person who the transferor reasonably believes is purchasing for its own account or accounts as to which it exercises sole investment discretion and that such Person is a QIB, in each case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction. After the expiration of the Distribution Compliance Period, such certification requirements shall not apply to such transfers of beneficial interests in the Regulation S Global Notes.
(d) Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the trustee a written certificate (in the form provided in Exhibit C or D hereto, as applicable) to the effect that such transfer is being made in accordance with Rule 904 of Regulation S or Rule 144 (if available).
SECTION 2.04. Restrictive Legend.
(a) Except as provided in Section 2.03 hereof, prior to the Resale Restriction Termination Date, each certificate evidencing the Notes issued on the Issue Date or any Additional Notes subsequently issued as Transfer Restricted Securities shall bear a legend in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF PRIDE INTERNATIONAL, INC. (THE "COMPANY") THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(K) UNDER THE SECURITIES ACT THAT APPLIES TO THIS SECURITY, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. [IF CERTIFICATED: IN ADDITION, WITH RESPECT TO ANY TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (A)(V) ABOVE) PRIOR TO THE EXPIRATION OF SUCH HOLDING PERIOD, THE HOLDER WILL DELIVER TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AND, IN THE CASE OF A TRANSFER PURSUANT TO CLAUSE (A)(IV) ABOVE, A LEGAL OPINION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER BY IT COMPLIES WITH THE FOREGOING RESTRICTIONS.]
ARTICLE 3
REPRESENTATIONS OF THE COMPANY
SECTION 3.01. Authority of the Company. The Company is duly authorized to execute and deliver this First Supplemental Indenture, and all corporate action on its part required for the execution and delivery of this First Supplemental Indenture has been duly and effectively taken.
SECTION 3.02. Truth of Recitals and Statements. The Company warrants that the recitals of fact and statements contained in this First Supplemental Indenture are true and correct, and that the recitals of fact and statements contained in all certificates and other documents furnished thereunder will be true and correct.
ARTICLE 4
CONCERNING THE TRUSTEE
SECTION 4.01. Acceptance of Trusts. The Trustee accepts the trusts hereunder and agrees to perform the same, but only upon the terms and conditions set forth in the Original Indenture
and in this First Supplemental Indenture, to all of which the Company and the respective Holders of the Notes at any time hereafter outstanding agree by their acceptance thereof.
SECTION 4.02. No Responsibility of Trustee for Recitals, Etc. The recitals and statements contained in this First Supplemental Indenture shall be taken as the recitals and statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this First Supplemental Indenture, except that the Trustee is duly authorized by all necessary corporate actions to execute and deliver this First Supplemental Indenture.
ARTICLE 5
MISCELLANEOUS PROVISIONS
SECTION 5.01. Relation to the Original Indenture. The provisions of this First Supplemental Indenture shall become effective immediately upon the execution and delivery hereof. This First Supplemental Indenture and all the terms and provisions herein contained shall form a part of the Original Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Original Indenture; provided, however, such terms and provisions shall be so included in this First Supplemental Indenture solely for the benefit of the Company, the Subsidiary Guarantors, if any, the Trustee and the Holders of the Notes. The Original Indenture is hereby ratified and confirmed and shall remain and continue in full force and effect in accordance with the terms and provisions thereof, as supplemented by this First Supplemental Indenture, and the Original Indenture and this First Supplemental Indenture shall be read, taken and construed together as one instrument.
SECTION 5.02. Meaning of Terms. Any term used in this First Supplemental Indenture which is defined in the Original Indenture shall have the meaning specified in the Original Indenture, unless the context shall otherwise require.
SECTION 5.03. Counterparts of Supplemental Indenture. This First Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
SECTION 5.04. Governing Law. This First Supplemental Indenture and the Notes shall be governed by and construed in accordance with the internal laws of the State of New York, except to the extent the laws of the State of New York require the application of the laws of another jurisdiction.
IN WITNESS WHEREOF, Pride International, Inc. has caused this First Supplemental Indenture to be executed in its corporate name by a duly authorized officer, and JPMorgan Chase Bank has caused this First Supplemental Indenture to be executed by a duly authorized officer, all as of the date first above written.
PRIDE INTERNATIONAL, INC.
By: /s/ Steven D. Oldham ------------------------------------ Steven D. Oldham Vice President - Treasury and Investor Relations |
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Larry O' Brien ------------------------------------ Larry O'Brien Vice President |
EXHIBIT A
[FORM OF FACE OF NOTE]
[RULE 144A GLOBAL SECURITY]
[REGULATION S GLOBAL SECURITY]
PRIDE INTERNATIONAL, INC.
7 3/8% SENIOR NOTE DUE 2014
[ADD LEGENDS REQUIRED BY SECTION 2.04 OF THE FIRST SUPPLEMENTAL INDENTURE TO THE INDENTURE REFERRED TO ON THE OTHER SIDE OF THIS NOTE]
[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 DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST THEREIN.]*
CUSIP No. [ ]
No. $________________
Pride International, Inc., a Delaware corporation, promises to pay to _____________, or registered assigns, the principal sum of ____________________________ Dollars[, or such greater or lesser amount as indicated on the Schedule of Exchanges of Securities hereto,]* on July 15, 2014.
This Note shall bear interest as specified on the other side of this Note. All capitalized terms used herein without definition shall have the respective meanings assigned thereto in the Indenture referred to on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this Note.
PRIDE INTERNATIONAL, INC.
By: __________________________________________
Name:
Title:
By: __________________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
JPMORGAN CHASE BANK,
as Trustee
By:_____________________________
Authorized Officer
Dated:__________________________
[FORM OF REVERSE SIDE OF NOTE]
7 3/8% SENIOR
NOTE DUE 2014
1. Interest
Pride International, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at the rate per annum shown above. The Company shall pay such interest semi-annually in arrears on July 15 and January 15 of each year, commencing January 15, 2005. Interest will be paid on each such Interest Payment Date to the Holder as of the immediately preceding Regular Record Date, even if such Interest Payment Date is a Redemption Date, Change in Control Purchase Date or other Maturity date, but subject to the provisions of the Indenture respecting payment of defaulted interest. 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 July 7, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Notwithstanding any contrary provision in the Indenture, the Company promises to pay interest on demand at the rate of 8.375% per annum, compounded semi-annually, on overdue principal of, premium, if any, and interest on the Notes, including any Redemption Price or Change in Control Purchase Price (to the extent that payment of such interest is enforceable under applicable law).
2. Method of Payment
Upon the terms and subject to the conditions of the Indenture, the Company will make all payments of the Redemption Price and Change in Control Purchase Price and principal due at Maturity in respect of the Notes to Holders who surrender such Notes to a Paying Agent to collect such payments; provided that if any Redemption Date, Change in Control Purchase Date or other Maturity date is an Interest Payment Date, accrued and unpaid interest shall be paid to the Holder as of the immediately preceding Regular Record Date. The Company will pay all amounts due in respect of the Notes in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Company will make such payments (i) by wire transfer of immediately available funds to any account maintained in the United States with respect to Global Securities or Notes held in certificated form with an aggregate principal amount in excess of $2,000,000 whose Holder has requested such method of payment and provided wire transfer instructions to the Paying Agent or (ii) by check payable in such money mailed to a Holder's registered address with respect to any certificated Notes.
3. Paying Agent and Registrar
Initially, JPMorgan Chase Bank, the Trustee under the Indenture, will act as Paying Agent and Registrar at its office at 4 New York Plaza, 15th Floor, New York, New York 10004. The Company may appoint and change any Paying Agent or Registrar without notice to any Holder, provided that the Company shall maintain in The City of New York an office or agency of the Registrar and the Paying Agent. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
4. Indenture
This Note is one of a duly authorized series of Securities of the Company, designated as its 7 3/8% Senior Notes due 2014, issued under an Indenture dated as of July 1, 2004, as amended and supplemented by the First Supplemental Indenture dated as of the Issue Date and as it may otherwise be supplemented thereafter with applicability to the Notes (as so amended and supplemented, 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 (the "Trust Indenture Act"), except as provided in the Indenture. Capitalized terms used herein or on the face hereof and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of those terms. Those terms are incorporated herein by reference.
The Notes are unsecured, general obligations of the Company initially limited to an aggregate principal amount specified in the Indenture, but with the right of the Company, subject to the conditions set forth in the Indenture, to issue from time to time after the Issue Date an unlimited aggregate principal amount of Additional Notes. The Indenture provides for the issuance of other series of debt securities (including the Notes, the "Securities") thereunder.
5. Redemption at the Option of the Company
(a) At any time prior to July 15, 2007, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a Redemption Price of 107.375% of the principal amount, plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders on a Regular Record Date to receive interest due on the relevant Interest Payment Date), with the net cash proceeds of one or more Equity Offerings, provided that:
- at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and
- the redemption occurs within 180 days of the date of the closing of such Equity Offering.
(b) On and after July 15, 2009, the Company may redeem all or a part of the Notes at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the Notes redeemed to the applicable Redemption Date (subject to the right of Holders on a Regular Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2009.................................................. 103.688%
2010.................................................. 102.458%
2011.................................................. 101.229%
2012 and thereafter................................... 100.000%
|
(c) The Company may redeem all or a part of the Notes, at any time prior to July 15, 2009, at a Redemption Price equal to the greater of:
- 100% of the principal amount of the Notes to be redeemed plus accrued but unpaid interest to the Redemption Date; and
- (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the Redemption Date to July 15, 2009 (except for currently accrued but unpaid interest) (assuming the Notes are redeemed, and based on the applicable Redemption Price, on that date) discounted to the Redemption Date, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the Treasury Rate, plus 50 basis points, plus (b) accrued but unpaid interest to the Redemption Date (subject to the right of Holders on a Regular Record Date to receive interest due on the relevant Interest Payment Date).
The actual Redemption Price, calculated as provided in this clause (c), shall be calculated and certified to the Trustee and the Company by the Independent Investment Banker. For purposes of determining the Redemption Price pursuant to this clause (c), the following definitions are applicable:
"Comparable Treasury Issue" means the United States Treasury security or securities selected by the Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to July 15, 2009 that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity.
"Comparable Treasury Price" means, for any Redemption Date, (1) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means Citigroup Global Markets Inc. and any successor firm, or if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Citigroup Global Markets Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and their respective successors, plus two
other dealers selected by the Independent Investment Banker that are primary U.S. government securities dealers in New York City; provided, if any of Citigroup Global Markets Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. or any primary U.S. government securities dealer selected by the Independent Investment Banker shall cease to be a primary U.S. government securities dealer, then such other primary U.S. government securities dealers as may be substituted by the Independent Investment Banker.
"Reference Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) at 3:30 p.m., New York City time, on the third Business Day preceding such Redemption Date, as quoted in writing to the Trustee by such Reference Treasury Dealer.
"Treasury Rate" means, with respect to any Redemption Date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week in which the calculation date falls (or in the immediately preceding week if the calculation date falls on any day prior to the usual publication date for such release) or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date, and no later than the Business Day next preceding the Redemption Date the Company shall deliver to the Trustee a written notice setting forth the Redemption Price and showing its calculation in reasonable detail. Any weekly average yields calculated by interpolation or extrapolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded upward.
(d) No sinking fund is provided for the Notes.
6. Purchase by the Company at the Option of the Holder upon a Change in Control
Upon to the terms and subject to the conditions of the Indenture, if any Change in Control resulting in a Rating Decline occurs, the Company shall, at the option of the Holder, purchase all Notes for which a Change in Control Purchase Notice shall have been delivered as provided in the Indenture and not withdrawn, as of the date that is 35 Business Days after the occurrence of such Change in Control, for a Change in Control Purchase Price equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, thereon through and including the Change in Control Purchase Date (subject to the right of Holders on a Regular Record Date to
receive interest due on the relevant Interest Payment Date). The Change in Control Purchase Price shall be paid in cash.
Holders have the right to withdraw any Change in Control Purchase Notice by delivering to the Paying Agent a written notice of withdrawal prior to the close of business on the Change in Control Purchase Date in accordance with the provisions of the Indenture.
If cash sufficient to pay the Change in Control Purchase Price of all Notes or portions thereof to be purchased as of the Change in Control Purchase Date is deposited with the Paying Agent on the Business Day following the Change in Control Purchase Date, then interest ceases to accrue on such Notes (or portions thereof) after the Change in Control Purchase Date and the Holders thereof shall have no other rights as such (other than the right to receive the Change in Control Purchase Price upon surrender of such Note). No interest on the Notes to be purchased will be payable by the Company on any Interest Payment Date subsequent to the Business Day following the Change in Control Purchase Date, if the requirements of the immediately preceding sentence are satisfied.
7. Notice of Redemption
Notice of redemption will be given in the manner provided in the Indenture not less than 30 days nor more than 60 days prior to the Redemption Date. If money sufficient to pay the Redemption Price of all Notes (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent by 11:00 a.m., New York City time, on the Redemption Date, from and after such Redemption Date, interest ceases to accrue on such Notes or portions thereof. No interest on redeemed Notes will be payable by the Company on any Interest Payment Date subsequent to the Redemption Date. Notes in denominations larger than $1,000 of principal amount may be redeemed in part but only in integral multiples of $1,000 of principal amount.
8. Denominations; Transfer; Exchange
The Notes initially are issued are in permanent global form. Under certain circumstances described in the Indenture, Notes may also be issued in the form of certificated Notes in fully registered form, without coupons, in minimum denominations of $1,000 principal amount or in integral multiples thereof. A Holder may register a transfer or exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any transfer taxes or similar governmental changes required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any Notes selected for redemption in whole or in part (except the unredeemed portion of any Note to be redeemed in part) or any Notes during a period beginning 15 Business Days prior to the mailing of the relevant notice of redemption or repurchase and ending on the close of business on the day of mailing such notice.
9. Persons Deemed Owners
The Person in whose name this Note is registered may be treated as the owner of this Note for all purposes.
10. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) 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 Notes at the time outstanding and (ii) certain defaults or noncompliance with certain provisions may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes at the time outstanding. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Notes in certain respects set forth in the Indenture.
11. Defaults and Remedies
Under the Indenture, Events of Default include (i) default in the
payment of interest that continues for a period of 30 days; (ii) default in the
payment of the principal amount, Redemption Price or Change in Control Purchase
Price with respect to any Note when the same becomes due and payable; (iii)
failure by the Company to comply with any of the provisions of Sections 3.12 and
3.14, Section 4.14 or Section 5.01 of the Indenture; (iv) failure by the Company
for 60 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 (or, if the default affects
more than one series of Securities issued under the Indenture, the holders of at
least 25% in aggregate outstanding principal amount of all series so affected);
(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 (other than Limited Recourse Indebtedness) of
the Company or any Subsidiary when due within the applicable grace period, or
the acceleration of such Indebtedness by the holders thereof, which Indebtedness
exceeds $50 million in the aggregate; (vii) entry of certain judgments or orders
against the Company or any Subsidiary; and (viii) certain events of bankruptcy
or insolvency with respect to the Company or any of its Significant
Subsidiaries. If an Event of Default occurs and is continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding may declare the principal amount of the Notes to
be due and payable immediately, together with accrued and unpaid interest
thereon, except that, in the case of an Event of Default specified in clause
(iv) above, if the Event of Default affects more than one series of Securities,
the Trustee, or the Holders of not less than 25% in principal amount of the
outstanding Securities of all series so affected shall be required to make such
declaration. Certain events of bankruptcy or insolvency are Events of Default
that will result in the principal amount of the Notes, together with accrued and
unpaid interest thereon, becoming due and payable immediately upon the
occurrence of such Events of Default.
As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless certain conditions set forth in the Indenture have been satisfied. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity satisfactory to it. Subject to certain limitations (including that, in some cases, a majority in principal amount of all outstanding Securities is required), Holders of a majority in aggregate principal amount of the
outstanding Notes have the right to direct the time, method and place of conducting certain proceedings, or exercising any trust or power conferred on the Trustee.
12. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company with the same rights it would have if it were not Trustee.
13. Discharge Prior to Maturity.
The Indenture with respect to the Notes shall be discharged and canceled upon the payment of all of the Notes and shall be discharged except for certain obligations upon the irrevocable deposit with the Trustee of any combination of funds and U.S. Government Obligations sufficient for such payment.
14. No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the Company, any Subsidiary Guarantor or the Trustee, as such, shall not have any liability for any obligations of the Company under the Notes, for any obligations of any Subsidiary Guarantor under any Subsidiary Guarantee or for any obligations of the Company, any Subsidiary Guarantor or the Trustee under the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Notes.
15. Transfer Restrictions.
By its acceptance of any Note bearing a legend restricting transfer, each Holder of such Note acknowledges the restrictions on transfer of such Note set forth in the Indenture and in such legend and agrees that it will transfer such Note only as provided in the Indenture.
16. Authentication
This Note shall not be valid until an authorized officer of the Trustee or any authenticating agent manually signs the Certificate of Authentication on the other side of this Note.
17. Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform Transfers to Minors Act).
18. Governing Law
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF NEW YORK REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[19. Registration Rights Agreement
The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated [__________,_____], among the Company and the Initial Purchasers.](+)
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture which has in it the text of this Note. Requests may be made to:
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
Attention: General Counsel
TRANSFER NOTICE
This Transfer Notice relates to $______________________ principal amount of the 7 3/8% Senior Notes due 2014 of Pride International, Inc., a Delaware corporation, held by ______________________________ (the "Transferor").
(I) or (we) assign and transfer this Note to
and irrevocably appoint _______________________________ agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Date: __________________
Signature Guarantee:_________________________________________________ (Participant in a Recognized Signature Guarantee Medallion Program)
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the date that is two years after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate (as defined below) of the Company, the undersigned confirms that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to Pride International, Inc.; or
(2) [ ] to a "qualified institutional buyer" pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), that is purchasing for its own account or for the account of a "qualified institutional buyer" to whom notice is given that the resale, pledge or other transfer is being made in reliance on Rule 144A; or
(3) [ ] outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act;
(4) [ ] pursuant to an exemption from the registration requirements of the Securities Act provided by Rule 144 under the Securities Act; or
(5) [ ] pursuant to an effective registration statement under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any
Person other than the registered holder thereof; provided, however,
that unless box (5) is checked the Trustee may require, prior to
registering any such transfer of the Notes such legal opinions (if box
(4) is checked), certifications and other information as the Company or
the Trustee has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, such
as the exemption provided by Rule 144 under such Act.
Unless the box below is checked, the undersigned confirms that such Note is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act (an "Affiliate"):
(6) [ ] The transferee is an Affiliate of the Company.
Signature: ___________________________________
Date: ______________
Signature Guarantee:_________________________________________________ (Participant in a Recognized Signature Guarantee Medallion Program)
TO BE COMPLETED BY PURCHASER IF BOX (2) ABOVE IS CHECKED.
The undersigned (i) represents and warrants that it is purchasing this Note for
its own account or for an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, (ii) is aware that the sale to it is being made in reliance on Rule 144,
(iii) acknowledges that this Note has not been registered under the Securities
Act and may not be sold except in compliance with the legend on the face of this
Note and that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and (iv) is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_______________
OPTION OF HOLDER TO ELECT PURCHASE
UPON CHANGE IN CONTROL
If you want to elect to have this Note purchased by the Company pursuant to Section 3.12 of the Indenture, check this box: [ ]
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 3.12 of the Indenture, state the principal amount you elect to have purchased: $_____________________ (in multiples of $1,000)
This Note (or the portion thereof specified above) shall be purchased as of the Change in Control Purchase Date pursuant to the terms and conditions specified in paragraph 6 of this Note and in the Indenture.
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)
[SCHEDULE OF EXCHANGES OF SECURITIES]*
The following exchanges of a part of this Global Security for other Notes have been made:
Signature of
Principal Amount Authorized
of this Officer
Amount of Amount of Global Security of Trustee or
Decrease in Increase in Following Global
Principal Amount of Principal Amount of Such Decrease Security
Date of Exchange this Global Security this Global Security (or Increase) Custodian
---------------- -------------------- -------------------- ------------- ---------
|
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of ___________________, among Pride International, Inc., a Delaware corporation (the "Company"), ________________________ (the "Subsidiary Guarantor"), a direct or indirect subsidiary of the Company, and JPMorgan Chase Bank, New York state banking corporation, as trustee under the indenture referred to below (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Original Indenture"), dated as of July 1, 2004, as supplemented by the First Supplemental Indenture dated as of July 7, 2004 [add appropriate references to any further supplements] (the Original Indenture, as so supplemented, being herein referred to as the "Indenture"), providing for the issuance of the Company's 7 3/8% Senior Notes due 2014 (the "Notes");
WHEREAS, Section 4.17 of the Indenture provides that under certain circumstances the Company is required to cause the Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the Subsidiary Guarantor shall unconditionally guarantee all of the Company's obligations under the Notes and the Indenture pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Company and the Trustee are authorized to execute and deliver this Supplemental Indenture without the consent of Holders;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders from time to time of the Notes, as follows:
1. Definitions. (a) Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The Subsidiary Guarantor hereby agrees, jointly and severally with any other Subsidiary Guarantors under the Indenture, to guarantee the Company's obligations under the Notes on the terms and subject to the conditions set forth in Article XI of the Indenture and to be bound by all other applicable provisions of the Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
3. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF NEW YORK REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
4. Trustee Makes No Representation. The recitals and statements contained in this Supplemental Indenture shall be taken as the recitals and statements of the Company and the Subsidiary Guarantor, 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 Supplemental Indenture, except that the Trustee is duly authorized by all necessary corporate actions to execute and deliver this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
6. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
PRIDE INTERNATIONAL, INC.
By: ____________________________________________
Name:
Title:
[SUBSIDIARY GUARANTOR],
By: ____________________________________________
Name:
Title:
JPMORGAN CHASE BANK, as Trustee
By: ____________________________________________
Name:
Title:
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
PURSUANT TO RULE 144A, ETC.
Re: 7 3/8% Senior Notes due 2014 of Pride International, Inc. (the "Issuer")
This Certificate relates to $_____ principal amount of the above captioned Notes held in definitive form (the "Securities") by _____________________ (the "Transferor").
The Transferor has requested the Trustee by written order to exchange or register the transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the Transferor does hereby certify that the Transferor is familiar with the Indenture relative to the Securities and that the transfer of this Security does not require registration under the Securities Act (as defined below) because:*
[ ] Such Security is being acquired for the Transferor's own account without transfer.
[ ] Such Security is being transferred to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")), in accordance with Rule 144A under the Securities Act, that is purchasing for its own account or for the account of another qualified institutional buyer, in each case to whom notice is given that the transfer is being made in reliance on Rule 144A.
[ ] Such Security is being transferred in accordance with Rule 144 under the Securities Act (and based on an opinion of counsel if the Issuer or the Trustee so requests).
[ ] Such Security is being transferred in reliance on and in compliance with another exemption from the registration requirements of the Securities Act (and based on an opinion of counsel if the Issuer so requests).
*Check appropriate response.
[INSERT NAME OF TRANSFEROR]
By: ______________________________________
Name:
Title:
Address:
Date:____________________
EXHIBIT D
CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS OF SECURITIES PURSUANT TO REGULATION S
[Date]
Pride International, Inc.
c/o JPMorgan Chase Bank, Trustee
4 New York Plaza , 15th Floor
New York, New York 10004
Attn: Institutional Trust Services
Re: Pride International, Inc. (the "Issuer") 7 3/8% Senior Notes due 2014 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed transfer of $______ aggregate principal amount of the Securities, we confirm that such transfer has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in the United States;
(b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 904(a) of Regulation S; and
(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.
In addition, if the sale is made during a distribution compliance period and the provisions of Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 904(b)(1).
You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[NAME OF TRANSFEROR]
By: ____________________________________
Authorized Signatory
APPENDIX A
FORM OF REGISTRATION RIGHTS AGREEMENT
Exhibit 4.3
PRIDE INTERNATIONAL INC.
$500,000,000 7 3/8% Senior Notes due 2014
REGISTRATION RIGHTS AGREEMENT
July 7, 2004
CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
NATEXIS BLEICHROEDER INC.
BNP PARIBAS SECURITIES CORP.
CALYON SECURITIES (USA) INC.
As Representatives of the Initial Purchasers
c/o CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Pride International, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several parties named in Schedule I hereto (the "Initial Purchasers") for whom you are acting as representatives, upon the terms set forth in a purchase agreement dated June 22, 2004 (the "Purchase Agreement"), $500,000,000 aggregate principal amount of its 7 3/8% Senior Notes due 2014 (the "Securities") relating to the initial placement of the Securities (the Initial Placement"). To induce the Initial Purchasers to enter into the Purchase Agreement and to satisfy a condition of your obligations thereunder, the Company agrees with you for your benefit and the benefit of the other holders from time to time of the Securities (including the Initial Purchasers) or the New Securities, as follows:
1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified Person shall mean any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified Person. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether
by contract or otherwise; and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing.
"Broker-Dealer" shall mean any broker or dealer registered as such under the Exchange Act.
"Business Day" shall have the meaning specified therefor in the Indenture.
"Commission" shall mean the United States Securities and Exchange Commission.
"DTC" shall mean The Depository Trust Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" shall mean the lesser of
(i) the 180-day period following the consummation of the Registered Exchange
Offer, exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement, and
(ii) the period commencing on the consummation of the Registered Exchange Offer
and ending on the date on which all Exchanging Dealers, if any, have sold all
New Securities held by them.
"Exchange Offer Registration Statement" shall mean a registration statement of the Company on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Exchanging Dealer" shall mean any Holder (which may include any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any of its Affiliates).
"Holder" shall mean (i) any holder of Securities (including
the Initial Purchasers), (ii) any holder of New Securities referred to in
Section 2(f) hereof that is also an Initial Purchaser and (iii) any Exchanging
Dealer during the Exchange Offer Registration Period that holds New Securities
covered by the Exchange Offer Registration Statement.
"Indenture" shall mean the Indenture, dated as of July 1, 2004, between the Company and JPMorgan Chase Bank, as trustee, as supplemented by the First Supplemental Indenture dated as of the date hereof relating to the Securities, and as the same may be amended from time to time in accordance with the terms thereof.
"Initial Placement" shall have the meaning set forth in the preamble hereto.
"Initial Purchasers" shall have the meaning set forth in the preamble hereto.
"Issue Date" shall have the meaning specified in the Indenture.
"Losses" shall have the meaning set forth in Section 7(d) hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Securities and New Securities registered under a Registration Statement.
"Managing Underwriters" shall mean the investment banker or investment bankers and manager or managers that shall administer an underwritten offering.
"New Securities" shall mean debt securities of the Company
with terms identical in all material respects to the Securities (except that the
interest rate step-up provisions and the transfer restrictions under the Act
shall be eliminated for all such debt securities other than those referred to in
Section 2(f) hereof) and to be issued under the Indenture.
"Person" shall have the meaning specified in the Indenture.
"Prospectus" shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble hereto.
"Registered Exchange Offer" shall mean the proposed offer of the Company to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for the Securities, a like aggregate principal amount of the New Securities.
"Registration Default" shall have the meaning set forth in
Section 4 hereof.
"Registration Statement" shall mean any Exchange Offer Registration Statement or Shelf Registration Statement.
"Second Notice" shall have the meaning set forth in Section 5(k) hereof.
"Securities" shall have the meaning set forth in the preamble hereto.
"Shelf Filing Date" shall have the meaning set forth in
Section 3(b)(i) hereof.
"Shelf Registration" shall mean a registration effected pursuant to Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Staff" shall mean the staff of the Commission.
"Suspension Notice" shall have the meaning set forth in
Section 5(k) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Trustee" shall mean the trustee with respect to the Securities and the New Securities under the Indenture.
"underwriter" shall mean any underwriter of Securities or New Securities in connection with an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer. Except as set forth in Section 3, (a) the Company shall prepare and, not later than 90 days following the date of the original issuance of the Securities (or if such 90th day is not a Business Day, the next succeeding Business Day), shall file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Company shall use its reasonable best efforts to cause the Exchange Offer Registration Statement to become effective under the Act within 180 days of the date of the original issuance of the Securities (or if such 180th day is not a Business Day, the next succeeding Business Day).
(b) Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for New Securities (assuming
that such Holder makes the representations to the Company set forth in clauses
(i)-(vii) of Section 2(e) below) to trade such New Securities from and after
their receipt without any limitations or restrictions under the Act (subject to
the exceptions set forth in clauses (iii) and (v) of Section 2(e) in relation to
Holders that are Affiliates of the Company and Exchanging Dealers, respectively)
and without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company shall:
(i) mail or otherwise distribute to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 20 Business Days and use its reasonable best efforts to cause the Registered Exchange Offer
to be completed within 45 days after the Commission declares the Exchange Offer Registration Statement effective (or, in each case, longer if required by applicable law);
(iii) use its reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required, under the Act until the consummation of the Registered Exchange Offer and thereafter during the Exchange Offer Registration Period to ensure that it is available for sales of New Securities by Exchanging Dealers;
(iv) permit Holders to withdraw tendered Securities at any time prior to the close of the Registered Exchange Offer;
(v) prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Company is conducting the Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B) including a representation that the Company has not entered into any arrangement or understanding with any Person to distribute the New Securities to be received in the Registered Exchange Offer and that, to the best of the Company's information and belief, each Holder participating in the Registered Exchange Offer is acquiring the New Securities in the ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the New Securities; and
(vi) comply in all material respects with all applicable laws relating to the Registered Exchange Offer.
(d) As soon as practicable after the close of the Registered Exchange Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer in accordance with the terms of the Registered Exchange Offer, the Exchange Offer Registration Statement and the letter of transmittal; and
(ii) cause the Trustee promptly to authenticate a global certificate representing New Securities exchanged for Securities and cause the depositary for the Registered Exchange Offer to deliver, through the facilities of DTC, to each Holder of Securities a principal amount of New Securities equal to the principal amount of the Securities of such Holder so accepted for exchange.
(e) Each Holder hereby acknowledges and agrees that any
Affiliate of the Company, any Broker-Dealer and any other Holder using the
Registered Exchange Offer to participate in a distribution of the New Securities
(x) could not under Commission policy as in effect on the date of this Agreement
rely on the position of the Commission in Morgan Stanley and Co., Inc. (pub.
avail. June 5, 1991) and Exxon Capital Holdings Corporation (pub. avail. May 13,
1988), as interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993 and similar no-action letters; and (y) must comply with the
registration and prospectus
delivery requirements of the Act in connection with any secondary resale transaction and must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that, at the time of the consummation of the Registered Exchange Offer:
(i) any New Securities received by such Holder will be acquired in the ordinary course of its business;
(ii) such Holder has no arrangement or understanding with any Person to participate in the distribution of the Securities or the New Securities within the meaning of the Act;
(iii) such Holder is not an Affiliate of the Company or, if it is an Affiliate of the Company, it will comply with the registration and prospectus delivery requirements of the Act to the extent applicable;
(iv) if such Holder is not a Broker-Dealer, it is not engaged in, and does not intend to engage in, the distribution of the New Securities within the meaning of the Act;
(v) if such Holder is an Exchanging Dealer, it will deliver a prospectus in connection with any resale of the New Securities;
(vi) if such Holder is a Broker-Dealer, it did not purchase from the Company the Securities to be exchanged for New Securities in the Registered Exchange Offer; and
(vii) such Holder is not acting on behalf of any Person who could not truthfully make the foregoing representations.
(f) If any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser made within 90 days after the consummation of the Registered Exchange Offer, the Company shall issue and deliver to such Initial Purchaser or the Person purchasing New Securities registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of New Securities. The Company shall request the CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer.
(g) If, following the date hereof there is announced a change in Commission policy with respect to exchange offers such as the Registered Exchange Offer, that in the reasonable opinion of counsel to the Company raises a substantial question as to whether the Registered Exchange Offer is permitted by applicable federal law, the Company hereby agrees to seek a no-action letter or other favorable decision from the Commission allowing the Company
to consummate the Registered Exchange Offer of Securities for New Securities, unless the Company makes a good faith determination based on the advice of counsel that such a request would be denied in light of publicly available no-action letters, in which case the Company shall proceed to file a Shelf Registration Statement pursuant to the provisions of Section 3 hereof.
3. Shelf Registration. (a) If (i) notwithstanding the efforts contemplated in Section 2(g), due to any change in applicable law or interpretations thereof by the Staff, the Company determines upon advice of its outside counsel that it is not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the Registered Exchange Offer is not consummated within 225 days of the date hereof; (iii) any Initial Purchaser so requests, within the 90-day period specified in Section 2(f) above, with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer and that are held by it following consummation of the Registered Exchange Offer; (iv) any Holder (other than an Initial Purchaser or an Affiliate of the Company) is not eligible to participate in the Registered Exchange Offer because of any applicable laws or interpretations thereof by the Staff; or (v) in the case of any Initial Purchaser that participates in the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, such Initial Purchaser does not receive freely tradable New Securities in exchange for Securities constituting any portion of an unsold allotment (it being understood that (x) the requirement that an Initial Purchaser deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of New Securities acquired in exchange for such Securities shall result in such New Securities being not "freely tradable" and (y) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not "freely tradable"), the Company shall effect a Shelf Registration Statement in accordance with subsection (b) below. In the case of clause (ii) of this Section 3(a), if the Registered Exchange Offer is consummated, the Company may terminate any Shelf Registration Statement then in effect, without penalty, at any time.
(b) (i) The Company shall use its reasonable best efforts to file a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution set forth in such Shelf Registration Statement with the Commission on or before the later of (A) 60 days after so required or requested pursuant to this Section 3, and (B) 90 days after the date hereof (or, if such 60th or 90th day, as applicable, is not a Business Day, the next succeeding Business Day), such later date being referred to herein as the "Self Filing Date;" and thereafter the Company shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Act on or before 90 days after the Shelf Filing Date (or, if such 90th day is not a Business Day, the next succeeding Business Day; provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further, that with respect to New Securities received by an Initial Purchaser in exchange for Securities constituting any portion of an unsold allotment, the Company may, if permitted by current interpretations by the Staff, file a post-effective amendment to the
Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction of its obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement.
(ii) The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the Commission or such shorter period that will terminate when all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or may be sold pursuant to Rule 144(k) under the Act (in any such case, such period being called the "Shelf Registration Period"). The Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if the Company voluntarily takes any action that would result in Holders of securities covered thereby not being able to offer and sell such securities during that period, unless (A) such action is required by applicable law or (B) such action is taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets or other material corporate transaction or event, so long as the Company complies with the requirements of Section 5(k) hereof, if applicable.
(iii) The Company shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Act and the rules and regulations of the Commission and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4. Additional Interest.
(a) In the event that (i) the Company has not filed the Exchange Offer Registration Statement or the Shelf Registration Statement with the Commission on or before the date on which such Registration Statement is required to be so filed pursuant to Section 2(a) and Section 3(b), respectively, or (ii) such Exchange Offer Registration Statement or Shelf Registration Statement has not been declared effective by the Commission under the Act on or before the date on which such Registration Statement is required to be declared effective under the Act pursuant to Section 2(a) or Section 3(b), respectively, or (iii) the Registered Exchange Offer has not been consummated on or prior to the date for completion specified in Sections 2(a) and 2(c)(ii), or (iv) the Exchange Offer Registration Statement or Shelf Registration Statement required by Section 2(a) or Section 3(b) hereof is filed and declared effective by the Commission under the Act but shall thereafter cease to be effective or usable (except as specifically permitted herein) without being succeeded immediately by an additional Registration Statement filed and
declared effective by the Commission under the Act (each such event referred to in clauses (i) through (iv) is referred to herein as a "Registration Default"), then the Company shall pay additional interest ("Additional Interest") on the affected Securities or New Securities that will accrue and be payable semiannually on such Securities or New Securities (in addition to the stated interest on such Securities or New Securities) from and including the date such Registration Default occurs to, but excluding, the date on which all Registration Defaults are cured (at which time the interest rate will be reduced to its initial rate). During the time that Additional Interest is accruing, the rate of Additional Interest shall be 0.25% per annum during the first 90-day period, and will increase by 0.25% per annum for each subsequent 90-day period during which any such Registration Default continues; provided, however, the rate of Additional Interest shall not exceed 1.00% per annum in the aggregate regardless of the number of Registration Defaults and that the Company shall not be required to pay Additional Interest with respect to more than one Registration Default at a time. In addition, a Holder shall not be entitled to receive any Additional Interest on its Securities if such Holder was, at the time of the consummation of the Registered Exchange Offer, eligible to participate therein but failed to tender such Securities for exchange in accordance with the terms of the Registered Exchange Offer. Additional Interest shall not accrue if the Company has filed the Exchange Offer Registration Statement with the Commission on or before the date on which such Registration Statement is required to be so filed pursuant to Section 2(a) but is unable to complete the Registered Exchange Offer because of a change in applicable law and the Company then proceeds to file the Shelf Registration Statement with the Commission on or before the date on which such Registration Statement is required to be filed pursuant to Section 3(b) and the Shelf Registration Statement is declared by the Commission under the Act on or before the date which such Registration Statement is required to be declared effective under the Act pursuant to Section 3(b). If, after the cure of all Registration Defaults then in effect, there is a subsequent Registration Default, the rate of Additional Interest that shall initially be in effect upon the occurrence of such subsequent Registration Default shall be 0.25% per annum during the first 90-day period following the occurrence of such Registration Default, regardless of the rate of Additional Interest in effect at the time of any prior Registration Default at the time of the cure of any such prior Registration Default. All Additional Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months and shall be payable on the same semiannual dates as other interest is payable on the Securities.
(b) Without limiting the remedies available to the
Initial Purchasers and the Holders, the Company acknowledges that any failure by
the Company to comply with its obligations under Section 2(a) and Section 3(b)
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Section 2(a) and Section 3(b) hereof.
5. Additional Registration Procedures. In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply.
(a) The Company shall:
(i) furnish to you, not less than five Business Days prior to the filing thereof with the Commission or such shorter period as may be reasonable in the circumstances, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing other than documents filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act that are deemed incorporated by reference in such Registration Statement or Prospectus) and shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as you reasonably propose;
(ii) include the substance of the information set forth in Annex A hereto in the forepart of such Prospectus in a section setting forth details of the Exchange Offer, in Annex B hereto in the underwriting or plan of distribution section of such Prospectus, and in Annex C hereto in the letter of transmittal used in connection with the Registered Exchange Offer;
(iii) if requested by an Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Registration Statement; and
(iv) in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities pursuant to the Shelf Registration Statement as selling security holders.
(b) The Company shall ensure that:
(i) any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto comply in all material respects with the Act and the rules and regulations thereunder; and
(ii) any Registration Statement and any amendment thereto do not, when they become effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) The Company shall advise you, the Holders of securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company a telephone or facsimile number and address for notices, and, if requested in writing by you or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(vi) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until the Company shall have remedied the basis for such suspension):
(i) when a Registration Statement and any amendment thereto have been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information, in each case after the Registration Statement has become effective;
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose;
(v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading; and
(vi) of the determination by the Company to suspend the availability of the Registration Statement or the use of the Prospectus for resales of securities covered thereby because (1) such action is required by applicable law or (B) such action is taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets or other material corporate transaction or event, which notice need not state the reasons therefor.
(d) The Company shall use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any state of the United States at the earliest possible time.
(e) The Company shall furnish to each Holder of securities covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, and, if the Holder so requests in writing, all material incorporated therein by reference and all exhibits thereto (including exhibits incorporated by reference therein).
(f) The Company shall, during the Shelf Registration Period, deliver to each Holder of securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request. The Company consents, subject to the provisions hereof, to the use during the Shelf Registration Period of the Prospectus or any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the securities covered by the
Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, and, if the Exchanging Dealer so requests in writing, all material incorporated by reference therein and all exhibits thereto (including exhibits incorporated by reference therein).
(h) The Company shall promptly deliver to each Initial Purchaser, each Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such Person may reasonably request. The Company consents, subject to the provisions hereof, to the use during the Exchange Offer Registration Period of the Prospectus or any amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer and any such other Person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.
(i) Prior to the Registered Exchange Offer or any other offering of Securities or New Securities pursuant to any Registration Statement, the Company shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such states of the United States as any Holder shall reasonably request and will maintain such qualification in effect so long as required; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to the imposition of any tax or to service of process in suits, other than those arising out of the Initial Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where it is not then so subject.
(j) If any of the Securities or New Securities are not issued in global form, then the Company shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Securities or New Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request.
(k) Upon the occurrence of any event contemplated by
subsections (c)(ii) through (v) above during the period for which the Company is
required to maintain an effective Registration Statement, the Company shall
promptly prepare a post-effective amendment to the applicable Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to initial purchasers
of the securities included therein, the Prospectus will not include an 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. If the Company notifies the Initial Purchasers, the
Holders of the securities covered by the Shelf Registration Statement and any
known Exchanging Dealer in accordance with subsections (ii) through (vi) of
Section 5(c) above
(a "Suspension Notice") to suspend the use of the Prospectus until the requisite changes to the Prospectus have been made or until the Company has delivered written notice to the Initial Purchasers, such Holders and such Exchanging Dealers that such Registration Statement is once again effective or available or that no supplement or amendment is required (the "Second Notice"), then the Initial Purchasers, such Holders and any such Exchanging Dealers shall suspend use of such Prospectus. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended by the number of days from and including the date of the giving of a Suspension Notice to and including the date when the Initial Purchasers, such Holders and any known Exchanging Dealer shall have received such amended or supplemented Prospectus or Second Notice pursuant to this Section 5(k).
(l) Not later than the effective date of any Registration Statement, the Company shall obtain a CUSIP number for the New Securities.
(m) The Company shall comply in all material respects with all rules and regulations of the Commission applicable to the Registered Exchange Offer or the Shelf Registration Statement and shall make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner.
(o) The Company may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of such securities as the Company may from time to time reasonably require for inclusion in such Registration Statement. The Company may exclude from such Shelf Registration Statement the securities of any Holder that unreasonably fails to furnish such information within 20 day after receiving such request.
(p) In the case of any Shelf Registration Statement, the Company shall enter into such agreements as are customary (including underwriting agreements in customary form, if requested) and take all other appropriate actions as the Managing Underwriters, if any, or (in the absence of an underwritten offering) the Majority Holders may reasonably request in order to expedite or facilitate the registration or the disposition of the securities covered by such Shelf Registration Statement, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable to the underwriters and the Holders participating therein than those set forth in Section 7 (or such other provisions and procedures reasonably requested by the Managing Underwriters, if any, or the Majority Holders with respect to all parties to be indemnified pursuant to Section 7).
(q) In the case of any Shelf Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Holders of securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such underwriter all relevant financial and other records, pertinent organizational documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, unless such disclosure is made pursuant to a subpoena or other order from a court of competent jurisdiction (provided that prior notice shall be provided as soon as practicable to the Company of the potential disclosure to permit the Company to obtain a protective order) or is otherwise required by law, or such information becomes available to the public generally (other than through the acts of such Holders or any such underwriter, attorney, accountant or agent) or through a third party without an accompanying obligation of confidentiality;
(iii) make such representations and warranties to the underwriters, if any, in form, substance and scope as are customarily made by the Company to underwriters in primary underwritten offerings of its nonconvertible debt securities (including the Securities) and covering matters including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to the underwriters, if any, covering such matters as are customarily covered in opinions requested in primary underwritten offerings of nonconvertible debt securities of the Company and such other matters as may be reasonably requested by such underwriters (it being agreed that the matters to be covered by such opinions may be subject to customary qualifications and exceptions);
(v) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the underwriters, if any, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings of nonconvertible debt securities of the Company (including the Securities); and
(vi) deliver such documents and certificates as may be reasonably requested by the Managing Underwriters, if any, including those to evidence compliance with Section 5(k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.
The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall be performed at each closing under any underwriting or similar agreement entered into in accordance with Section 8 hereof as and to the extent required thereunder.
(r) In the case of any Exchange Offer Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Initial Purchasers, and one firm of attorneys and one firm of accountants retained by the Initial Purchasers, all relevant financial and other records, pertinent organizational documents and properties of the Company and their respective subsidiaries; and
(ii) cause the Company's officers, directors and employees to supply all relevant information reasonably requested by the Initial Purchasers or any such firm in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Initial Purchasers or any such firm, unless such disclosure is made pursuant to a subpoena or other order from a court of competent jurisdiction (provided that prior notice shall be provided as soon as practicable to the Company of the potential disclosure to permit the Company to obtain a protective order) or is otherwise required by law, or such information becomes available to the public generally (other than through the acts of an Initial Purchaser or any such firm) or through a third party without an accompanying obligation of confidentiality.
(s) If a Registered Exchange Offer is to be consummated upon delivery of the Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the New Securities, the Company shall mark, or cause to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the New Securities. In no event shall the Securities be marked paid or otherwise satisfied. Interest on each New Security will accrue from the latest interest payment date on which interest was paid on the Security exchanged for such New Security or, if no interest has been paid, from the Issue Date.
(t) The Company will use its reasonable best efforts, if the Securities were not previously rated, to cause the securities covered by a Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by Majority Holders with respect to the related Registration Statement or by any Managing Underwriters.
(u) In the event that any Broker-Dealer shall underwrite any Securities or New Securities covered by a Self Registration Statement or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules and the By-Laws of the National Association of Securities Dealers, Inc.) thereof, whether as a Holder of such securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company shall use its reasonable best efforts to assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by:
(i) if such Rules or By-Laws shall so require, engaging a "qualified independent underwriter" (as defined in such Rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities;
(ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 7 hereof; and
(iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Rules.
6. Registration Expenses. The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 5 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or attorney designated by the Majority Holders to act as counsel for the Holders in connection therewith.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder of Securities or New Securities, as the
case may be, covered by any Registration Statement (including each Initial
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 5(h) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such Holder and each Person who controls any such Holder
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 as originally filed or in
any amendment thereof, or in any preliminary Prospectus or the 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 (in the case of the
Prospectus, in the light of the circumstances in which they were made) not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by it 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 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 such Holder
specifically for inclusion therein and (ii) with respect to any untrue statement
or omission or alleged untrue statement or omission made in any preliminary
Prospectus relating to a Shelf Registration Statement, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Exchanging Dealer or other Holder from whom the Person asserting any such
losses, claims, damages or liabilities purchased the securities concerned, to
the extent that a prospectus relating to such securities was required to be
delivered by such Holder under the Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder
results from the fact that 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 if the Company had previously furnished copies thereof to such Holder. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute as provided in Section 7(d) to Losses of any underwriter of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, its directors, officers, employees or agents and each Person who controls such underwriter on substantially the same basis as that of the indemnification of the Initial Purchasers and the selling Holders provided in this Section 7(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 5(p) hereof.
(b) Each Holder of securities covered by a Registration Statement (including each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 5(h) hereof, each Exchanging Dealer) severally agrees to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who signs such 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 such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 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, 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 subsection (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 subsection (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel (including local 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, other than local counsel if not appointed by the
indemnifying party, 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 (including local 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
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; provided, however, that it is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees, costs and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties. 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.
(d) In the event that the indemnity provided in subsection (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Initial Purchaser or any subsequent Holder of any Security or New Security be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a New Security, applicable to the Security that was exchangeable for such New Security, as set forth on the cover page of the Final Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, each applicable indemnifying party and indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, 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 Initial Placement (before deducting expenses) as determined from the Purchase Agreement. Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions as determined from the Purchase Agreement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or New Securities, as applicable, registered under the Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of material fact or omission or alleged omission to state a material fact relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission and any other equitable consideration appropriate under the circumstances. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this subsection (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 7, each Person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, 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 subsection (d).
(e) The provisions of this Section 7 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder or the Company or any of the officers, directors or controlling Persons referred to in this Section 7, and will survive the sale by a Holder of securities covered by a Registration Statement.
8. Underwritten Registrations. (a) If any of the Securities or New Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders; provided, however, such Managing Underwriters shall be reasonably acceptable to the Company.
(b) No Person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such Person (i) agrees to sell such Person's Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.
(c) Notwithstanding anything to the contrary herein, the
Company shall not be required to effect, or enter into any agreement with
respect to, any underwritten offering of less than $100,000,000 aggregate
principal amount of securities; provided, however, that the limitations of this
Section 8(c) shall not apply, following the consummation of the Registered
Exchange Offer, to any securities registered for sale for the account of any
Initial Purchaser pursuant to a Shelf Registration.
9. No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.
10. Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Holders of a majority of the aggregate principal amount of all Securities and New Securities then outstanding and affected thereby; provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement. Notwithstanding the foregoing sentence, (i) this Agreement may be amended, without the consent of any Holder, by written agreement signed by the Company and the Initial Purchasers, to cure any ambiguity, correct or supplement any provision of this Agreement that may be inconsistent with any other provision of the Agreement or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with other provisions of this Agreement, (ii) this Agreement may be amended, modified or supplemented, and waivers and consents to departures from the provisions hereof may be given, by written agreement signed by the Company and the Initial Purchasers to the extent that any such amendment, modification, supplement, waiver or consent is, in their reasonable judgment, necessary or appropriate to comply with applicable laws and regulations (including any interpretation of the Staff) or any changes therein and (iii) to the extent any provision of this Agreement relates to an Initial Purchaser, such provision may be amended, modified or supplemented, and waivers or consents to departures from such provisions may be given, by written agreement signed by such Initial Purchaser and the Company.
11. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier, electronic mail or air courier guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section, which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to Citigroup Global Markets Inc. at the address indicated in Section 12 of the Purchase Agreement;
(b) if to you, initially in care of Citigroup Global Markets Inc. at the address set forth on the first page of this Agreement; and
(c) if to the Company, initially at the address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when received.
The Initial Purchasers or the Company by notice to the other parties may designate additional or different addresses for subsequent notices or communications.
12. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company, subsequent Holders of Securities and New Securities. The Company hereby agrees to extend the benefits of this Agreement to any Holder of Securities and New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.
13. Counterparts. This agreement may be in signed counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
14. Headings. The headings used herein are for convenience only and shall not affect the construction hereof.
15. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.
16. Severability. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.
17. Securities Held by the Company, Etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
[Signature pages follow.]
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 building agreement among the Company and the several Initial Purchasers.
Very truly yours,
PRIDE INTERNATIONAL INC.
By: /s/ Steven D. Oldham ------------------------------------- Steven D. Oldham Vice President - Treasury and Investor Relations |
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
NATEXIS BLEICHROEDER INC.
BNP PARIBAS SECURITIES CORP.
CALYON SECURITIES (USA) INC.
As Representatives of the Initial Purchasers
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ Stephen P. Cunningham -------------------------------------- Stephen P. Cunningham Managing Director |
SCHEDULE I
(Initial Purchasers)
Citigroup Global Markets Inc.
Banc of America Securities LLC
Deutsche Bank Securities Inc.
Natexis Bleichroeder Inc.
BNP Paribas Securities Corp.
Calyon Securities (USA) Inc.
Schedule I
ANNEX A
Each Broker-Dealer that receives New Securities for its own account in exchange for Securities, where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. See "Plan of Distribution."
Annex A
ANNEX B
PLAN OF DISTRIBUTION
Each Broker-Dealer that receives New Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, starting on the Expiration Date and ending on the close of business 180 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any Broker-Dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Securities by Broker-Dealers. New Securities received by Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-Dealer that resells New Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Securities may be deemed to be an "underwriter" within the meaning of the Act and any profit of any such resale of New Securities and any commissions or concessions received by any such Persons may be deemed to be underwriting compensation under the Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Act.
For a period of 180 days after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Broker-Dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all reasonable expenses incident to the Exchange Offer (including the reasonable expenses of one counsel for the holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any Broker-Dealers) against certain liabilities, including liabilities under the Act.
If applicable, add information required by Regulation S-K Items 507 and/or 508.
Annex B
ANNEX C
If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, the distribution of New Securities within the meaning of the Act and it has no arrangements or understandings with any Person to participate in a distribution of the Securities or the New Securities within the meaning of the Act. If the undersigned is a Broker-Dealer, the undersigned represents that it will receive New Securities for its own account in exchange for Securities, and that the Securities to be exchanged for New Securities were acquired by it as a result of market-making activities or other trading activities, and it acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Act.
Annex C
EXHIBIT 5.1
ONE SHELL PLAZA AUSTIN
910 LOUISIANA BAKU
BAKER BOTTS L.L.P. HOUSTON, TEXAS DALLAS
77002-4995 HOUSTON
713.229.1234 LONDON
FAX 713.229.1522 MOSCOW
NEW YORK
RIYADH
WASHINGTON
August 10, 2004
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
|
Ladies and Gentlemen:
As set forth in the Registration Statement on Form S-4 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") by Pride International, Inc., a Delaware corporation (the "Company"), under the Securities Act of 1933, as amended (the "Act"), relating to the registration under the Act of the offering and issuance of $500 million aggregate principal amount of the Company's 7 3/8% Senior Notes due 2014 (the "New Notes"), to be offered by the Company in exchange (the "Exchange Offer") for a like principal amount of the Company's issued and outstanding 7 3/8% Senior Notes due 2014 (the "Old Notes"), certain legal matters in connection with the New Notes are being passed upon for you by us. The New Notes are to be issued under an Indenture, dated as of July 1, 2004 (the "Base Indenture"), between the Company and JPMorgan Chase Bank, as trustee (the "Trustee"), as amended and supplemented by the First Supplemental Indenture thereto dated as of July 7, 2004 (the Base Indenture, as so amended and supplemented, the "Indenture"). At your request, this opinion is being furnished to you for filing as Exhibit 5.1 to the Registration Statement.
In our capacity as your counsel in the connection referred to above, we
have examined originals, or copies certified or otherwise identified, of the
Company's Certificate of Incorporation and Bylaws, each as amended to date, the
Indenture, corporate records of the Company, including minute books of the
Company, as furnished to us by the Company, certificates of public officials and
of representatives of the Company, statutes and other instruments and documents
as a basis for the opinion hereinafter expressed. We have assumed that the
signatures on all documents examined by us are genuine, all documents submitted
to us as originals are authentic and all documents submitted to us as certified
or photostatic copies conform to the originals thereof. We also have assumed
that (i) the Indenture has been duly authorized, executed and delivered by the
Trustee and constitutes the legal, valid and binding obligation of the Trustee,
(ii) the Registration Statement will have become effective under the Act and the
Indenture will have been qualified under the Trust Indenture Act of 1939, as
amended, and (iii) the New Notes will have been duly executed, authenticated and
delivered in accordance with the provisions of the Indenture and issued in
exchange for Old Notes pursuant to, and in accordance with the terms of, the
Exchange Offer as contemplated in the Registration Statement.
On the basis of the foregoing, and subject to the qualifications and limitations hereinafter set forth, we are of the opinion that the New Notes, when issued, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance
BAKER BOTTS L.L.P.
2 August 10, 2004
with their terms, except as that enforcement is subject to (a) any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or other laws relating to or affecting creditors' rights generally and (b) general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).
The opinion set forth above is limited in all respects to matters of the law of the State of New York, the General Corporation Law of the State of Delaware and applicable federal law. We hereby consent to the filing of this opinion of counsel as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our Firm under the heading "Legal Matters" in the prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Baker Botts L.L.P. |
EXHIBIT 15.1
ACCOUNTANT'S AWARENESS LETTER
August 10, 2004
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that our report dated May 10, 2004 on our review of interim financial information of Pride International, Inc. (the "Company") for the three month periods ended March 31, 2004 and March 31, 2003 and included in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2004 and our report dated August 6, 2004 on our review of interim financial information of the Company for the three and six month periods ended June 30, 2004 and June 30, 2003 and included in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2004 are incorporated by reference in its Registration Statements on Form S-3 and S-4, each dated August 10, 2004.
Very truly yours,
/s/ PricewaterhouseCoopers LLP Houston, Texas |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of our report dated March 11, 2004, except for Note 15, as to which the date is August 6, 2004, relating to the financial statements for the year ended December 31, 2003, which appears in Pride International, Inc.'s Current Report on Form 8-K dated August 10, 2004. We also consent to the references to us under the headings "Experts" and "Independent Registered Public Accounting Firm" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP Houston, Texas August 10, 2004 |
EXHIBIT 25.1
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
JPMORGAN CHASE BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(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)
DELAWARE 76-0069030
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
5847 SAN FELIPE, SUITE 3300
HOUSTON, TEXAS 77057
(Address of principal executive offices) (Zip Code)
----------------------------------------------------------
7 3/8% SENIOR NOTES DUE 2014
(Title of the indenture securities)
-------------------------------------------------------------------
|
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 and Guarantors.
If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, 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 November 11, 2001 in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase 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 333-76894, 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 November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase 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, JPMorgan Chase 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 2nd day of August, 2004.
JPMORGAN CHASE BANK
By /s/ L. O'Brien
------------------------------
/s/ L. O'Brien
Vice President
|
EXHIBIT 7 TO FORM T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
JPMorgan Chase 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 March 31, 2004, 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
IN MILLIONS
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................... $ 19,589
Interest-bearing balances ............................................ 35,104
Securities:
Held to maturity securities ............................................... 156
Available for sale securities ............................................. 64,028
Federal funds sold and securities purchased under
agreements to resell
Federal funds sold in domestic offices ............................... 30,180
Securities purchased under agreements to resell ...................... 74,963
Loans and lease financing receivables:
Loans and leases held for sale ....................................... 19,061
Loans and leases, net of unearned income ............................. $163,825
Less: Allowance for loan and lease losses ............................ 2,771
Loans and leases, net of unearned income and
allowance ............................................................ 161,054
Trading Assets ............................................................ 191,989
Premises and fixed assets (including capitalized leases) .................. 5,959
Other real estate owned ................................................... 118
Investments in unconsolidated subsidiaries and associated companies ....... 837
Customers' liability to this bank on acceptances outstanding .............. 203
Intangible assets
Goodwill .......................................................... 2,539
Other Intangible assets ........................................... 4,521
Other assets .............................................................. 38,391
TOTAL ASSETS .............................................................. $648,692
========
|
LIABILITIES
Deposits
In domestic offices .................................................... $210,211
Noninterest-bearing .................................................... $ 80,262
Interest-bearing ....................................................... 129,949
In foreign offices, Edge and Agreement subsidiaries and IBF's .......... 120,623
Noninterest-bearing .................................................... $ 7,920
Interest-bearing ....................................................... 112,703
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices ............................ 6,480
Securities sold under agreements to repurchase ......................... 102,641
Trading liabilities ......................................................... 114,412
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases) .............................. 20,692
Bank's liability on acceptances executed and outstanding .................... 203
Subordinated notes and debentures ........................................... 8,039
Other liabilities ........................................................... 26,877
TOTAL LIABILITIES ........................................................... 610,178
Minority Interest in consolidated subsidiaries .............................. 346
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,785
Surplus (exclude all surplus related to preferred stock) ................... 16,318
Retained earnings ........................................................... 20,049
Accumulated other comprehensive income ...................................... 16
Other equity capital components ............................................. 0
TOTAL EQUITY CAPITAL ........................................................ 38,168
--------
TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL .................... $648,692
========
|
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.
WILLIAM B. HARRISON, JR. )
ELLEN V. FUTTER )DIRECTORS
FRANK A. BENNACK, JR. )
Exhibit 99.1
PRIDE INTERNATIONAL, INC.
LETTER OF TRANSMITTAL
FOR TENDER OF ALL OUTSTANDING
7 3/8% SENIOR NOTES DUE 2014
IN EXCHANGE FOR REGISTERED
7 3/8% SENIOR NOTES DUE 2014
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [_________ ___], 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
Deliver to the Exchange Agent:
JPMorgan Chase Bank
(214) 468-6464
BY REGISTERED OR CERTIFIED MAIL:
JPMorgan Chase Bank
Institutional Trust Services
P.O. Box 2320 Dallas, Texas 75221-2320
Attention: Beth Mullin
BY HAND OR OVERNIGHT COURIER:
JPMorgan Chase Bank
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
Attention: Beth Mullin
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(214) 468-6494
Attention: Beth Mullin
Confirm by Telephone:
(214) 468-6464
For information call (214) 468-6464.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the prospectus dated [_________ ___], 2004 (the "Prospectus"), of Pride International, Inc. (the "Company") and this letter of transmittal. These two documents together constitute the offer by the Company to exchange its 7 3/8% Senior Notes due 2014 (the "New Notes"), the issuance of which has been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of the Company's issued and outstanding unregistered 7 3/8% Senior Notes due 2014 (the "Old Notes"). The offer to exchange the New Notes for the Old Notes is referred to as the "Exchange Offer."
The Company reserves the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer for the Old Notes is
open, at its discretion, in which event the term "Expiration Date" shall mean
the latest date to which the Exchange Offer is extended. The Company shall
notify JPMorgan Chase Bank (the "Exchange Agent") of any extension by oral or
written notice and shall make a public announcement thereof no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
This letter of transmittal is to be used by a holder of Old Notes if (i)
certificates of Old Notes are to be forwarded herewith or (ii) delivery of Old
Notes is to be made by book-entry transfer to the account maintained by the
Exchange Agent at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange Offer --
Procedures for Tendering -- Book-Entry Transfer" and an "agent's message" is not
delivered as described in the Prospectus under the caption "The Exchange Offer
-- Procedures for Tendering -- Tendering Through DTC's Automated Tender Offer
Program." Tenders by book-entry transfer may also be made by delivering an
agent's message in lieu of this letter of transmittal pursuant to DTC's
Automated Tender Offer Program ("ATOP"). Holders of Old Notes whose Old Notes
are not immediately available, or who are unable to deliver their Old Notes,
this letter of transmittal and all other documents required hereby to the
Exchange Agent or to comply with the applicable procedures under DTC's ATOP on
or prior to the Expiration Date, must tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 2.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to the Exchange Offer for Old Notes means any person in whose name such Old Notes are registered on the books of the security registrar for the Old Notes, any person who holds such Old Notes and has obtained a properly completed bond power from the registered holder or any participant in the DTC system whose name appears on a security position listing as the holder of such Old Notes and who desires to deliver such Old Notes by book-entry transfer at DTC. The undersigned has completed, executed and delivered this letter of transmittal to indicate the action the undersigned desires to take with respect to such Exchange Offer. Holders who wish to tender their Old Notes must complete this letter of transmittal in its entirety (unless such Old Notes are to be tendered by book-entry transfer and an agent's message is delivered in lieu hereof pursuant to DTC's ATOP).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Old Notes tendered under this letter of transmittal. If the space below is inadequate, list the registered numbers and principal amounts on a separate signed schedule and affix the list to this letter of transmittal.
DESCRIPTION OF OLD NOTES TENDERED
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S) EXACTLY
AS NAME(S) APPEAR(S) ON OLD
NOTES (PLEASE FILL IN, IF BLANK) OLD NOTE(S) TENDERED
-------------------------------- -----------------------------------------------------------------------
AGGREGATE PRINCIPAL
AMOUNT
REPRESENTED PRINCIPAL AMOUNT
REGISTERED NUMBER(S)* BY NOTE(S) TENDERED**
--------------------- ------------------- ----------------
Total
|
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Old Notes will be deemed to have tendered the entire aggregate principal amount represented by such Old Notes. All tenders must be in integral multiples of $1,000.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering Institution: _________________________________________
DTC Account Number(s): ________________________________________________
Transaction Code Number(s): ___________________________________________
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED)
(FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Old Notes: _________________________
Date of Execution of Notice of Guaranteed Delivery: ___________________
Window Ticket Number (if available): __________________________________
Name of Eligible Institution that Guaranteed Delivery: ________________
DTC Account Number(s) (if delivered by book-entry transfer): __________
Transaction Code Number(s) (if delivered by book-entry transfer): _____
Name of Tendering Institution (if delivered by book-entry transfer): __
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:
Name: _________________________________________________________________
Address: ______________________________________________________________
Telephone/Facsimile No. for Notices: __________________________________
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company for exchange the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this letter of transmittal, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes tendered for exchange hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact for the undersigned (with full knowledge that said Exchange Agent also acts as the agent for the Company in connection with the Exchange Offer) with respect to the tendered Old Notes with full power of substitution to (i) deliver such Old Notes, or transfer ownership of such Old Notes on the account books maintained by DTC, to the Company, as applicable, and deliver all accompanying evidences of transfer and authenticity, and (ii) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Old Notes tendered hereby and to acquire the New Notes issuable upon the exchange of such tendered Old Notes, and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are accepted for exchange by the Company.
The undersigned acknowledges that the Exchange Offer is being made in reliance upon interpretations set forth in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the "SEC"), including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), Mary Kay Cosmetics, Inc. (available June 5, 1991), Shearman & Sterling (available July 2, 1993) and similar no-action letters (the "Prior No-Action Letters"), that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act; provided that such New Notes are acquired in the ordinary course of such holders' business and such holders are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such New Notes. The SEC has not, however, considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as it has in other interpretations to other parties.
The undersigned hereby further represents to the Company that (i) any New Notes received are being acquired in the ordinary course of business of the person receiving such New Notes, whether or not the undersigned, (ii) neither the undersigned nor any such other person has an arrangement or understanding with any person to participate in the distribution of the Old Notes or the New Notes within the meaning of the Securities Act and (iii) neither the holder nor any such other person is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company or, if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.
If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer, the undersigned represents that it will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, and it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If the undersigned is a broker-dealer, the undersigned represents that it did not purchase the Old Notes to be exchanged for the New Notes from the Company. Additionally, the undersigned represents that it is not acting on behalf of any person who could not truthfully and completely make the foregoing representations and the representations in the
immediately preceding paragraph. The undersigned acknowledges that if the undersigned is tendering Old Notes in the Exchange Offer with the intention of participating in any manner in a distribution of the New Notes (i) the undersigned cannot rely on the position of the staff of the SEC set forth in the Prior No-Action Letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes, in which case the registration statement must contain the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K under the Securities Act and (ii) failure to comply with such requirements in such instance could result in the undersigned incurring liability for which the undersigned is not indemnified by the Company.
The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered hereby, including the transfer of such Old Notes on the account books maintained by DTC.
For purposes of the Exchange Offer, the Company shall be deemed to have accepted for exchange validly tendered Old Notes when, as and if the Company gives oral or written notice thereof to the Exchange Agent. Any tendered Old Notes that are not accepted for exchange pursuant to the Exchange Offer for any reason will be returned, without expense, to the undersigned as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this letter of transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this letter of transmittal shall be binding upon the undersigned's successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives. This tender may be withdrawn only in accordance with the procedures set forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal of Tenders."
The undersigned acknowledges that the acceptance by the Company of properly tendered Old Notes pursuant to the procedures described under the caption "The Exchange Offer -- Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer.
The Exchange Offer is subject to certain conditions set forth in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), the Company may not be required to exchange any of the Old Notes tendered hereby.
Unless otherwise indicated under "Special Issuance Instructions," please issue the New Notes issued in exchange for the Old Notes accepted for exchange, and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned (or, in the case of a book-entry delivery of Old Notes, please credit the account indicated above maintained at DTC). Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail or deliver the New Notes issued in exchange for the Old Notes accepted for exchange and any Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the New Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any Old Notes not tendered or not exchanged to, the person(s) (or account(s)) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered for exchange.
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY if (i) Old To be completed ONLY if Old Notes in
Notes in a principal amount not a principal amount not tendered, or
tendered, or New Notes issued in New Notes issued in exchange for Old
exchange for Old Notes accepted for Notes accepted for exchange, are to
exchange, are to be issued in the be mailed or delivered to someone
name of someone other than the other than the undersigned, or to the
undersigned, or (ii) Old Notes undersigned at an address other than
tendered by book-entry transfer that that shown below the undersigned's
are not exchanged are to be returned signature. Mail or deliver New Notes
by credit to an account maintained and/or Old Notes to:
at DTC other than the DTC Account
Number set forth above. Issue New
Notes and/or Old Notes to:
Name: ______________________________ Name: _______________________________
Address: ___________________________ Address: ____________________________
______________________________________ ______________________________________
(include ZIP Code) (include ZIP Code)
___________________________________ ___________________________________
(Tax Identification or Social (Tax Identification or Social
Security Number) Security Number)
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)
|
[ ] Credit unexchanged Old Notes delivered by book-entry transfer to the DTC account number set forth below:
DTC Account Number:_____________________________________________________________
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(complete accompanying Substitute Form W-9 below)
X ____________________________________________________________________________
X ____________________________________________________________________________
(Signature(s) of Registered Holder(s) of Old Notes)
Dated _____________________________
(The above lines must be signed by the registered holder(s) of Old Notes as your/their name(s) appear(s) on the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this letter of transmittal. If Old Notes to which this letter of transmittal relate are held of record by two or more joint holders, then all such holders must sign this letter of transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit evidence satisfactory to the Company of such person's authority so to act. See Instruction 5 regarding the completion of this letter of transmittal, printed below.)
Name(s): ____________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (Full Title): ______________________________________________________
Address: ____________________________________________________________________
Area Code and Telephone Number: _____________________________________________
Taxpayer Identification or Social Security Number: __________________________
MEDALLION SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Certain signatures must be guaranteed by an Eligible Institution (as defined below). Please read Instruction 5 of this letter of transmittal to determine whether a signature guarantee is required for the tender of your Old Notes.
Signature(s) Guaranteed by an
Eligible Institution: _______________________________________________________
(Authorized Signature)
Dated ___________________________________
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES OR AGENT'S MESSAGE AND BOOK-ENTRY CONFIRMATIONS. All physically delivered Old Notes or any confirmation of a book-entry transfer to the Exchange Agent's account at DTC of Old Notes tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as a properly completed and duly executed copy of this letter of transmittal or facsimile hereof (or an agent's message in lieu hereof pursuant to DTC's ATOP), and any other documents required by this letter of transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. THE METHOD OF DELIVERY OF THE TENDERED OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR COURIER SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE ISSUER.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old
Notes and (a) whose Old Notes are not immediately available, (b) who cannot
deliver their Old Notes, this letter of transmittal or any other documents
required hereby to the Exchange Agent prior to the Expiration Date or (c) who
are unable to comply with the applicable procedures under DTC's ATOP prior to
the Expiration Date, must tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus. Pursuant to such procedures:
(i) such tender must be made by or through a firm that is a member of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, in each case that is a member in good standing of a recognized
Medallion Program approved by the Securities Transfer Association, Inc.,
including the Security Transfer Agent Medallion Program, the New York Stock
Exchange, Inc. Medallion Signature Program or the Stock Exchanges Medallion
Program (an "Eligible Institution"); (ii) prior to the Expiration Date, the
Exchange Agent must have received from the Eligible Institution a properly
completed and duly executed notice of guaranteed delivery (by facsimile
transmission, mail, courier or overnight delivery) or a properly transmitted
agent's message and notice of guaranteed delivery setting forth the name and
address of the holder of the Old Notes, the registration number(s) of such Old
Notes and the total principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, this letter of transmittal (or
facsimile hereof or an agent's message in lieu hereof) together with the Old
Notes in proper form for transfer (or a Book-Entry Confirmation) and any other
documents required hereby, will be deposited by the Eligible Institution with
the Exchange Agent; and (iii) this letter of transmittal (or facsimile hereof or
an agent's message in lieu hereof) together with the certificates for all
physically tendered Old Notes in proper form for transfer (or Book-Entry
Confirmation, as the case may be) and all other documents required hereby are
received by the Exchange Agent within three New York Stock Exchange trading days
after the Expiration Date.
Any holder of Old Notes who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the notice of guaranteed delivery prior to 5:00 p.m., New York City time, on the Expiration Date. Upon request of the Exchange Agent, a notice of guaranteed delivery will be sent to holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above.
See "The Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus.
3. TENDER BY HOLDER. Only a registered holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial holder of Old Notes who is not the registered holder and who wishes to tender should arrange with the registered holder to execute and deliver this letter of transmittal on his behalf or must, prior to completing and executing this letter of transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder's name or obtain a properly completed bond power from the registered holder.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering holder should fill in the principal amount tendered in the fourth column of the box entitled "Description of Old Notes Tendered" above. The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and New Notes issued in exchange for any Old Notes accepted will be returned to the holder as promptly as practicable after the Old Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURES. If this letter of transmittal (or facsimile hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this letter of transmittal (or facsimile hereof) is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the Old Notes. If any tendered Old Notes are owned of record by two or more joint owners, all of such owners must sign this letter of transmittal.
If this letter of transmittal (or facsimile hereof) is signed by the registered holder(s) of Old Notes listed and tendered hereby and the New Notes issued in exchange therefor are to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered holder(s), then said holder(s) need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such holder(s) must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this letter of transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution.
If this letter of transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority to act must be submitted with this letter of transmittal.
NO SIGNATURE GUARANTEE IS REQUIRED IF (i) THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(S) OF THE OLD NOTES TENDERED HEREIN (OR BY A PARTICIPANT IN DTC WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE OWNER OF THE TENDERED OLD NOTES) AND THE NEW NOTES ARE TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(S) (OR, IF SIGNED BY A PARTICIPANT IN DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT DTC) AND NEITHER THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" NOR THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" HAS BEEN COMPLETED OR (ii) SUCH OLD NOTES ARE TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN ALL OTHER CASES, ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should indicate, in the applicable box or boxes, the name and address to which New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this letter of transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at DTC as such noteholder may designate hereon. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address (or account number) of the person signing this letter of transmittal.
7. TRANSFER TAXES. The Company will pay or cause to be paid all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder and the Exchange Agent will retain possession of an amount of New Notes with a face amount at least equal to the amount
of such transfer taxes due by such tendering holder pending receipt by the Exchange Agent of the amount of such taxes.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a holder of any Old Notes or New Notes must provide the Company (as payor) with its correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual, is his or her social security number. If the Company is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service and backup withholding at the applicable rate on interest and principal payments on the New Notes as provided by applicable law.
To prevent backup withholding, each tendering holder must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), that the holder is a U.S. person (including a U.S. resident alien), and that (i) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the New Notes will be registered in more than one name or will not be in the name of the actual owner, consult the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 ("Instructions"), included with this Letter of Transmittal, for information on which TIN to report.
If a tendering holder does not have a TIN, such holder should consult the Instructions concerning applying for a TIN, check the box in Part 3 of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and date the form and the Certificate of Awaiting Taxpayer Identification Number. Checking this box, writing "applied for" on the form and signing such certificate means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. If such holder does not provide its TIN to the Company within 60 days, backup withholding will begin and continue until such holder furnishes its TIN to the Company.
Certain holders are not subject to the backup withholding and reporting requirements. These holders, which are referred to herein as exempt holders, include certain foreign persons and persons listed in the Instructions as payees exempt from backup withholding. Exempt holders (other than certain foreign persons) should indicate their exempt status on Substitute Form W-9. A foreign person may qualify as an exempt holder by submitting to the Exchange Agent a properly completed Internal Revenue Service Form W-8BEN, signed under penalties of perjury, attesting to that holder's exempt status. An Internal Revenue Service Form W-8BEN may be obtained from the Exchange Agent.
The Company reserves the right in its sole discretion to take whatever steps are necessary to comply with the Company's obligations regarding backup withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which might, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any conditions of the Exchange Offer or defects or irregularities of tenders as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including this letter of transmittal and the instructions hereto) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Notes nor shall any of them incur any liability for failure to give such notification.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive, in whole or part, any of the conditions to the Exchange Offer set forth in the Prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or contingent tender of Old Notes will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OLD Notes. Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further
instructions. This letter of transmittal and related documents cannot be processed until the procedures for replacing lost, stolen or destroyed Old Notes have been followed.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance or for additional copies of the Prospectus or this letter of transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page of this letter of transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN LIEU HEREOF (TOGETHER WITH THE OLD NOTES DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
--------------------------------
PART 1 - Please Provide Your TIN in Social Security Number
SUBSTITUTE the Box at Right (or Complete Part 3) or
FORM W-9 and Certify by Signing and Dating --------------------------------
Below Employer Identification Number
----------------------- ------------------------------------------------------ --------------------------------
PART 2 - Certification - Under penalties of perjury, I PART 3
certify that:
DEPARTMENT OF THE (1) The number shown on this form is Awaiting TIN [ ]
TREASURY my correct Taxpayer
INTERNAL REVENUE SERVICE Identification Number (or I have
PAYOR'S REQUEST FOR checked the box in part 3 and
TAXPAYER executed the Certificate of
IDENTIFICATION NUMBER Awaiting Taxpayer Identification
(TIN) Number below),
(2) I am not subject to backup Please complete the
________________________ withholding because: (a) I am Certificate of Awaiting
Name exempt from backup withholding, Taxpayer Identification
or (b) I have not been notified Number below.
________________________ by the Internal Revenue Service
Address (Number and (IRS) that I am subject to backup
Street) withholding as a result of
failure to report all interest or
dividends, or (c) the IRS has
notified me that I am no longer
subject to backup withholding, and
________________________ (3) I am a U.S. Person (including a
City, State and ZIP Code U.S. resident alien).
Certificate Instructions - You must cross out item (2) in Part 2 above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or dividends on your tax
return. However, if, after being notified by the IRS that you are subject to backup withholding, you
received another notification from the IRS stating that you are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE _________________________________ DATE______________________, 2004
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FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
AT THE APPLICABLE RATE OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE NEW
NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number to the payor within 60
days, the payor is required to withhold the applicable percentage of (1) any
reportable payments thereafter made to me until the payor receives a number and
(2) any withdrawal to the extent of reportable payments made to me during the
60-day period.
__________________________________ __________________________, 2004
SIGNATURE DATE
Exhibit 99.2
PRIDE INTERNATIONAL, INC.
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF ALL OUTSTANDING
7 3/8% SENIOR NOTES DUE 2014
IN EXCHANGE FOR REGISTERED
7 3/8% SENIOR NOTES DUE 2014
This form, or one substantially equivalent hereto, must be used by a holder to accept the Exchange Offer of Pride International, Inc. (the "Issuer") and to tender outstanding unregistered 7 3/8% Senior Notes due 2014 (the "Old Notes"), to JPMorgan Chase Bank, as exchange agent (the "Exchange Agent"), pursuant to the guaranteed delivery procedures described in "The Exchange Offer -- Guaranteed Delivery Procedures" of the Issuer's prospectus dated [_______ ___], 2004 (the "Prospectus") and in Instruction 2 to the related letter of transmittal. Any holder who wishes to tender Old Notes pursuant to such guaranteed delivery procedures must ensure that the Exchange Agent receives this notice of guaranteed delivery, properly completed and duly executed, prior to the Expiration Date (as defined below) of the Exchange Offer. Capitalized terms used but not defined in this letter have the meanings given to them in the letter of transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [________ ___], 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
JPMorgan Chase Bank
(214) 468-6464
BY REGISTERED OR CERTIFIED MAIL:
JPMorgan Chase Bank
Institutional Trust Services
P.O. Box 2320
Dallas, Texas 75221-2320
Attention: Beth Mullin
BY HAND OR OVERNIGHT COURIER:
JPMorgan Chase Bank
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
Attention: Beth Mullin
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(214) 468-6494
Attention: Beth Mullin
Confirm by Telephone:
(214) 468-6464
For information call (214) 468-6464.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS NOTICE OF GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF GUARANTEED DELIVERY IS COMPLETED.
This notice of guaranteed delivery is not to be used to guarantee signatures. If a signature on a letter of transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, that signature guarantee must appear in the applicable space in the box provided on the letter of transmittal for guarantee of signatures.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, in accordance with its offer, upon the terms and subject to the conditions set forth in the Prospectus and the related letter of transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures" and in Instruction 2 of the letter of transmittal.
The undersigned hereby tenders the Old Notes listed below:
CERTIFICATE NUMBER(S)
(IF KNOWN) OF OLD NOTES AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
OR ACCOUNT NUMBER AT DTC AMOUNT REPRESENTED AMOUNT TENDERED
________________________________
PLEASE SIGN AND COMPLETE
________________________________
_______________________________ _______________________________________
_______________________________ _______________________________________
Names of Registered Holder(s) Signature(s) of Registered Holder(s) or
Authorized Signatory
_______________________________
_______________________________ _______________________________________
Address Dated:
_______________________________
Area Code and Telephone Number(s)
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This notice of guaranteed delivery must be signed by the registered holder(s) of Old Notes exactly as the name(s) of such person(s) appear(s) on certificates for Old Notes or on a security position listing as the owner of Old Notes, or by person(s) authorized to become holder(s) by endorsements and documents transmitted with this notice of guaranteed delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must provide the following information:
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Address(es):
GUARANTEE
(not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, in each case that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agent Medallion Program, the New York Stock Exchange, Inc. Medallion Signature Program or the Stock Exchanges Medallion Program, hereby guarantees deposit with the Exchange Agent of the letter of transmittal (or facsimile thereof or agent's message in lieu thereof), together with the Old Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at the DTC described in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering -- Book-Entry Transfer" and in the letter of transmittal) and any other required documents, all by 5:00 p.m., New York City time, within three New York Stock Exchange trading days following the Expiration Date.
Name of Firm:_________________________ ____________________________________
(Authorized Signature)
Address:______________________________
(Include ZIP Code) Name:______________________________
Area Code and Telephone Number: Title:_____________________________
(Please Type or Print)
_______________________________ Date:______________________________
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DO NOT SEND OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and duly executed copy of this notice of guaranteed delivery (or facsimile hereof or an agent's message and notice of guaranteed delivery in lieu hereof) and any other documents required by this notice of guaranteed delivery with respect to the Old Notes must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. Delivery of such notice of guaranteed delivery may be made by facsimile transmission, mail, courier or overnight delivery. THE METHOD OF DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY AND ANY OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, holders may wish to consider using an overnight or courier service. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 2 of the letter of transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this notice of guaranteed delivery (or facsimile hereof) is signed by the registered holder(s) of the Old Notes referred to herein, the signature(s) must correspond exactly with the name(s) written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this notice of guaranteed delivery (or facsimile hereof) is signed by a participant in the DTC whose name appears on a security position listing as the owner of the Old Notes, the signature must correspond with the name as it appears on the security position listing as the owner of the Old Notes.
If this notice of guaranteed delivery (or facsimile hereof) is signed by a person other than the registered holder(s) of any Old Notes listed or a participant of the DTC, this notice of guaranteed delivery must be accompanied by appropriate bond powers, signed as the name(s) of the registered holder(s) appear(s) on the Old Notes or signed as the name(s) of the participant appears on the DTC's security position listing.
If this notice of guaranteed delivery (or facsimile hereof) is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit herewith evidence satisfactory to the Exchange Agent of such person's authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus and this notice of guaranteed delivery may be directed to the Exchange Agent at the address or telephone number set forth on the cover page hereof. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
Exhibit 99.3
PRIDE INTERNATIONAL, INC.
LETTER TO DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR TENDER OF ALL OUTSTANDING
7 3/8% SENIOR NOTES DUE 2014
IN EXCHANGE FOR REGISTERED
7 3/8% SENIOR NOTES DUE 2014
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [________ ___], 2004, UNLESS EXTENDED. OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
To Depository Trust Company Participants:
We are enclosing with this letter the materials listed below relating to
the offer by Pride International, Inc. to exchange its 7 3/8% Senior Notes due
2014 (the "New Notes"), the issuance of which has been registered under the
Securities Act of 1933, for a like principal amount of its issued and
outstanding unregistered 7 3/8% Senior Notes due 2014 (the "Old Notes"), upon
the terms and subject to the conditions set forth in Pride's prospectus dated
[___________], 2004 and the related letter of transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated [________ ___], 2004;
2. Letter of transmittal, together with accompanying Substitute Form W-9 Guidelines;
3. Notice of guaranteed delivery; and
4. Letter that may be sent to your clients for whose account you hold Old Notes in your name or in the name of your nominee, with space provided for obtaining that client's instruction with regard to the exchange offer.
We urge you to contact your clients promptly. Please note that the exchange offer will expire at 5:00 p.m., New York City time, on [________ ___], 2004, unless extended.
The exchange offer is not conditioned upon any minimum aggregate principal amount of Old Notes being tendered for exchange.
Pursuant to the letter of transmittal, each holder of Old Notes will represent to Pride that:
- any New Notes received are being acquired in the ordinary course of business of the person receiving such New Notes;
- such person does not have an arrangement or understanding with any person to participate in the distribution of the Old Notes or the New Notes within the meaning of the Securities Act;
- such person is not an "affiliate," as defined in Rule 405 under the Securities Act, of Pride, or, if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
- if such person is not a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution of New Notes;
- if such person is a broker-dealer, it will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, and it will
deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, it will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act;
- if such person is a broker-dealer, it did not purchase the Old Notes to be exchanged for the New Notes from Pride; and
- such person is not acting on behalf of any person who could not truthfully and completely make the foregoing representations.
The enclosed Letter to Clients contains an authorization by the beneficial owners of the Old Notes for you to make the foregoing representations.
Pride will not pay any fee or commission to any broker or dealer or to any other person (other than the Exchange Agent) in connection with the solicitation of tenders of Old Notes under the exchange offer. Pride will pay or cause to be paid any transfer taxes payable on the transfer of Old Notes to it, except as otherwise provided in Instruction 7 of the enclosed letter of transmittal.
Additional copies of the enclosed materials may be obtained from us upon request.
Very truly yours,
JPMORGAN CHASE BANK
Exhibit 99.4
PRIDE INTERNATIONAL, INC.
LETTER TO CLIENTS
FOR TENDER OF ALL OUTSTANDING
7 3/8% SENIOR NOTES DUE 2014
IN EXCHANGE FOR REGISTERED
7 3/8% SENIOR NOTES DUE 2014
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [________ ___], 2004, UNLESS EXTENDED. OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
To Our Clients:
We are enclosing with this letter a prospectus dated [________ ___], 2004 of Pride International, Inc. and the related letter of transmittal. These two documents together constitute Pride's offer to exchange its 7 3/8% Senior Notes due 2014 (the "New Notes"), the issuance of which has been registered under the Securities Act of 1933, for a like principal amount of its issued and outstanding unregistered 7 3/8% Senior Notes due 2014 (the "Old Notes"). The exchange offer is not conditioned upon any minimum aggregate principal amount of Old Notes being tendered for exchange.
We are the holder of record of Old Notes held by us for your own account. A tender of your Old Notes held by us can be made only by us as the record holder according to your instructions. The letter of transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account under the terms and conditions of the exchange offer. We also request that you confirm that we may, on your behalf, make the representations contained in the letter of transmittal.
Pursuant to the letter of transmittal, each holder of Old Notes will represent to Pride that:
- any New Notes received are being acquired in the ordinary course of business of the person receiving such New Notes;
- such person does not have an arrangement or understanding with any person to participate in the distribution of the Old Notes or the New Notes within the meaning of the Securities Act;
- such person is not an "affiliate," as defined in Rule 405 under the Securities Act, of Pride, or, if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
- if such person is not a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution of New Notes;
- if such person is a broker-dealer, it will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, and it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, it will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act;
Exhibit 99.4
- if such person is a broker-dealer, it did not purchase the Old Notes to be exchanged for the New Notes from Pride; and
- such person is not acting on behalf of any person who could not truthfully and completely make the foregoing representations.
Very truly yours,
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE OF THE EXCHANGE OFFER.
INSTRUCTION TO DTC PARTICIPANT
To Participant of DTC:
The undersigned hereby acknowledges receipt and review of the prospectus dated [________ ___], 2004 of Pride International, Inc. and the related letter of transmittal. These two documents together constitute Pride's offer to exchange its 7 3/8% Senior Notes due 2014 (the "New Notes"), the issuance of which has been registered under the Securities Act of 1933, for a like principal amount of its issued and outstanding unregistered 7 3/8% Senior Notes due 2014 (the "Old Notes").
This will instruct you, the registered holder and DTC participant, as to the action to be taken by you relating to the exchange offer for the Old Notes held by you for the account of the undersigned.
The aggregate principal amount of the Old Notes held by you for the account of the undersigned is (fill in amount): $__________.
With respect to the exchange offer, the undersigned hereby instructs you (check appropriate box):
[ ] TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OLD NOTES HELD BY YOU FOR THE
ACCOUNT OF THE UNDERSIGNED: $__________.
[ ] NOT TO TENDER ANY OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO DTC PARTICIPANT WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations contained in the letter of transmittal that are to be made with respect to the undersigned as a beneficial owner, including, but not limited to, the representations that:
- any New Notes received are being acquired in the ordinary course of business of the undersigned;
- the undersigned does not have an arrangement or understanding with any person to participate in the distribution of the Old Notes or the New Notes within the meaning of the Securities Act;
- the undersigned is not an "affiliate," as defined in Rule 405 under the Securities Act, of Pride, or, if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
- if the undersigned is not a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution of New Notes;
- if the undersigned is a broker-dealer, it will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, and it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act;
- if the undersigned is a broker-dealer, it did not purchase the Old Notes to be exchanged for the New Notes from Pride; and
- the undersigned is not acting on behalf of any person who could not truthfully and completely make the foregoing representations.
SIGN HERE
Name of beneficial owner(s):____________________________________________________
Signature(s):___________________________________________________________________
Name(s) (please print):_________________________________________________________
Address:________________________________________________________________________
Telephone Number:_______________________________________________________________
Taxpayer Identification or Social Security Number:______________________________
Date:___________________________________________________________________________