EXHIBIT 4.2
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PRIDE INTERNATIONAL, INC.
and
THE CHASE MANHATTAN BANK
Trustee.
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SECOND SUPPLEMENTAL INDENTURE
Dated as of _______ ___, 1999
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Supplementing the Indenture
dated as of
May 1, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE ONE SUPPLEMENT OF THE ORIGINAL INDENTURE..............................1
SECTION 1.1. Supplement to Article One of the Original Indenture........1
SECTION 1.2. Supplement to Article Four of the Original Indenture......15
SECTION 1.3. Supplement to Article Five of the Original Indenture......15
SECTION 1.4. Supplement to Article Eight of the Original Indenture.....16
SECTION 1.5. Supplement to Article Nine of the Original Indenture......18
SECTION 1.6. Supplement to Article Ten of the Original Indenture.......18
SECTION 1.7. Supplement to Article Eleven of the Original Indenture....28
SECTION 1.8. New Article Fourteen......................................29
SECTION 1.9. Effect of Article One.....................................33
ARTICLE TWO THE NOTES........................................................33
ARTICLE THREE REPRESENTATIONS OF THE COMPANY.................................34
SECTION 3.1. Authority of the Company..................................34
SECTION 3.2. Truth of Recitals and Statements..........................34
ARTICLE FOUR CONCERNING THE TRUSTEE..........................................34
SECTION 4.1. Acceptance of Trusts......................................34
SECTION 4.2. No Responsibility of Trustee for Recitals, etc............34
ARTICLE FIVE MISCELLANEOUS PROVISIONS........................................34
SECTION 5.1. Relation to this Indenture................................34
SECTION 5.2. Meaning of Terms..........................................34
SECTION 5.3. Counterparts of Supplemental Indenture....................34
SECTION 5.4. Governing Law.............................................35
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of ______ ___, 1999, between
Pride International, Inc., a Louisiana corporation formerly known as Pride
Petroleum Services, Inc. (the "Company"), and The Chase Manhattan Bank, as
Trustee (the "Trustee") under the Original Indenture referred to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture of even
date herewith (the "Original Indenture") pursuant to which the Securities are
issuable;
WHEREAS, Sections 201 and 901 of the Original Indenture provide that the
form or terms of any series of Securities may be established in an Indenture
supplemental thereto, and the Company desires to establish in this Second
Supplemental Indenture both the form and terms of a series of Securities
designated as its 10% Senior Notes due 2009 (the "Notes");
WHEREAS, Section 901 of the Original Indenture further provides that under
certain conditions the Company and Trustee, may, without the consent of any
Holders, from time to time and at any time, enter into an Indenture or
Indentures supplemental thereto, for the purposes, INTER ALIA, of adding to the
covenants of the Company for the benefit of the Holders of all or any series of
Securities, and adding any additional Events of Default, and the Company desires
by means of this Second Supplemental Indenture to add to its covenants for the
sole benefit of the Holders of the Notes and to add certain additional Events of
Default, also solely for the benefit of such Holders; and
WHEREAS, all things necessary to authorize the execution and delivery of
this First Supplemental Indenture, to establish the Notes as provided for in
this Second Supplemental Indenture, and to make the Original Indenture, as
supplemented by this Second Supplemental Indenture (the Original Indenture, as
so supplemented by this Supplemental Indenture, being sometimes referred to
herein as the "Indenture"), a valid agreement of the Company, in accordance with
its terms, have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that for and in consideration of the premises and the purchase of the Notes by
the Holders, the Company and the Trustee mutually covenant and agree, solely for
the equal and proportionate benefit of the respective Holders from time to time
of the Notes, as follows:
ARTICLE ONE
SUPPLEMENT OF THE ORIGINAL INDENTURE
SECTION 1.1.SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE. Section
101 of the Original Indenture is supplemented or superseded with respect to the
Notes, in the case of definitional paragraphs that may be inconsistent, by
inserting therein, in alphabetical order, the following definitional paragraphs:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the Fair Value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
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"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction other than a Sale
and Lease-Back Transaction that results in the creation or incurrence of (a) a
Capital Lease Obligation of the Company or any Subsidiary or (b) a lease of
newly acquired, improved, upgraded or constructed assets, which lease is treated
as an operating lease in accordance with GAAP and entered into within 180 days
of the later of commencement of commercial operations of such assets and
completion of such acquisition, improvement, upgrade or construction) by the
Company or any Subsidiary to any Person other than the Company or a Wholly Owned
Subsidiary, in one transaction, or a series of related transactions, of (i) any
Capital Stock of any Subsidiary (except for directors' qualifying shares or
certain minority interests sold to other Persons solely due to local law
requirements that there be more than one stockholder, but which are not in
excess of what is required for such purpose) or (ii) any other Property of the
Company or any Subsidiary, other than (A) sales of drill-string components and
obsolete or worn out equipment in the ordinary course of business or other
assets that, in the Company's reasonable judgment, are no longer used or useful
in the conduct of the business of the Company and its Subsidiaries, (B) any
drilling contract, charter (bareboat or otherwise) or other lease of Property
entered into by the Company or any Subsidiary in the ordinary course of
business, other than any Bargain Purchase Contract, (C) a Permitted Investment
or Restricted Payment permitted under Section 1009 hereof, (D) a Change of
Control, (E) a consolidation, merger or the disposition of all or substantially
all of the assets of the Company in compliance with Section 801 hereof, (F) any
trade or exchange by the Company or any Subsidiary of one or more drilling rigs
for one or more drilling rigs or other vessels or equipment for one or more
other Replacement Assets owned or held by another Person, PROVIDED that (x) the
Fair Value of the Property traded or exchanged by the Company or such Subsidiary
(including cash or cash equivalents to be delivered by the Company or such
Subsidiary) is reasonably equivalent to the Fair Value of the drilling rig or
rigs acquired (together with cash or cash equivalents to be received by the
Company or such Subsidiary), as determined by written appraisal by a nationally
(or industry) recognized investment banking firm or appraisal firm and (y) such
exchange is approved by a majority of the disinterested directors of the Company
and (G) any transfers that, but for this clause (G), would be Asset Sales, if
(y) the Company elects to designate such transfers as not constituting Asset
Sales and (z) after giving effect to such transfers, the aggregate Fair Market
Value of the Property or assets transferred in such transaction or any such
series of related transactions so designated by the Company does not exceed
$1,000,000. An Asset Sale shall include the requisition of title to, seizure of
or forfeiture of any Property or assets, or any actual or constructive total
loss or an agreed or compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, (1) if the Sale and Lease-Back
Transaction is a Capital Lease Obligation, the amount of Indebtedness
represented thereby according to the definition of "Capital Lease Obligation"
and (2) in all other instances, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease (or to the
first date on which the lessee is permitted to terminate such lease without the
payment of a penalty) included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
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"Average Life" means, as of any date, with respect to any debt security or
preferred stock, the quotient obtained by dividing (i) the sum of the products
of (x) the number of years from such date to the date of each scheduled
principal payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security or preferred stock multiplied in each case
by (y) the amount of such principal payment by (ii) the sum of all such
principal payments.
"Bargain Purchase Contract" means a drilling contract, charter (bareboat
or otherwise) or lease that provides for acquisition of Property by the other
party to such agreement during or at the end of the term thereof for less than
Fair Market Value thereof at the time such right to acquire such Property is
granted.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP. For purposes of Section 1015, a Capital
Lease Obligation shall be deemed secured by a Lien on the Property being leased.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
an equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person, the
aggregate consideration received for such Asset Sale by such Person in the form
of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof). For purposes of this
definition, "cash or cash equivalents" shall be deemed to include, for a period
not to exceed 12 months from the related Asset Sale, noncash consideration
received with respect to an Asset Sale to the extent that such noncash
consideration consists of (i) publicly traded debt securities of a Person, which
securities are rated as "BBB-" or higher by Standard & Poor's Ratings Services
("S&P") and "Baa3" or higher by Xxxxx'x Investors Service, Inc. ("Moody's"), or
(ii) other Indebtedness of a Person if (x) the lowest rated long-term, unsecured
debt obligation issued by such Person is rated "BBB-" or higher by S&P and
"Baa3" or higher by Moody's or (y) in the case of other Indebtedness, the
payment of such other Indebtedness is secured by an irrevocable letter of credit
issued by a commercial bank having capital and surplus in excess of $100 million
and long-term unsecured debt obligations rated at least "A-" by S&P and "A3" by
Moody's.
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")) has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the Voting Stock of the Company; (ii) the Company is merged
with or into or consolidated with another corporation and, immediately after
giving effect to the merger or consolidation, less than 50% of the outstanding
voting securities entitled to vote generally in the election of directors or
persons who serve similar functions of the surviving or resulting entity are
then beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if the record date has been set to
determine the stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date; (iii) the
Company, either individually or in conjunction with one or more Subsidiaries,
sells, conveys, transfers or leases, or the Subsidiaries sell, convey, transfer
or lease, all or substantially all of the assets of the Company and the
Subsidiaries, taken as a whole (either in one transaction or a
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series of related transactions), including Capital Stock of the Subsidiaries, to
any Person (other than a Wholly Owned Subsidiary or a newly formed entity having
substantially the same shareholders, directly or indirectly, as the Company with
holdings in substantially the same proportion as such shareholders' holdings in
the Company); (iv) the liquidation or dissolution of the Company; or (v) the
first day on which a majority of the individuals who constitute the Board of
Directors are not Continuing Directors.
"Consolidated Current Liabilities" of any Person means, as of any date,
the total liabilities (including tax and other proper accruals) of such Person
and its subsidiaries (other than Non-Recourse Subsidiaries) on a consolidated
basis at such date which may properly be classified as current liabilities in
accordance with GAAP, after eliminating (1) all intercompany items between such
Person and its subsidiaries (other than Non-Recourse Subsidiaries) or between
subsidiaries (other than Non-Recourse Subsidiaries) and (2) all current
maturities of long-term Indebtedness.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company for the latest four fiscal quarters for which financial
information in respect thereof is available immediately prior to the applicable
Transaction Date (the "Determination Period") to (ii) the aggregate Consolidated
Interest Expense of the Company that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of, and interest payments in respect of, Indebtedness of the
Company and its consolidated Subsidiaries expected by the Company to be
outstanding on the Transaction Date and reasonably anticipated by the Company to
be outstanding from time to time during such period), assuming for the purposes
of this measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date, PROVIDED that if the Company or any of its consolidated
Subsidiaries is a party to any Interest Swap Obligation which would have the
effect of changing the interest rate on any Indebtedness of the Company or any
of its consolidated Subsidiaries for such four-quarter period (or a portion
thereof), the resulting rate shall be used for such four-quarter period or
portion thereof; PROVIDED, HOWEVER, that any Consolidated Interest Expense of
the Company with respect to Indebtedness incurred or retired by the Company or
any of its Subsidiaries during the fiscal quarter in which the Transaction Date
occurs shall be calculated as if such Indebtedness was so incurred or retired on
the first day of the fiscal quarter in which the Transaction Date occurs;
PROVIDED, FURTHER, that if the transaction giving rise to the need to calculate
the Consolidated Interest Coverage Ratio would have the effect of increasing or
decreasing EBITDA in the future and if such increase or decrease is readily
quantifiable and is directly attributable to such transaction, EBITDA shall be
calculated on a pro forma basis as if such transaction had occurred on the first
day of the four fiscal quarters referred to in clause (i) of this definition,
and if, during the same four fiscal quarters, (x) the Company or any of its
consolidated Subsidiaries shall have engaged in any Asset Sale, EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive), or
increased by an amount equal to the EBITDA (if negative), directly attributable
to the assets which are the subject of such Asset Sale for such period
calculated on a pro forma basis as if such Asset Sale and any related retirement
of Indebtedness had occurred on the first day of such period or (y) the Company
or any of its consolidated Subsidiaries shall have acquired any material assets
other than in the ordinary course of business, EBITDA and Consolidated Interest
Expense (if Indebtedness is incurred or assumed in connection with such
acquisition) shall be calculated on a pro forma basis as if such acquisition and
related financing had occurred on the first day of such period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, (A) the sum of (i) the aggregate amount of cash and
noncash interest expense (including capitalized interest) of such Person and its
subsidiaries (other than Non-Recourse Subsidiaries) for
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such period as determined on a consolidated basis in accordance with GAAP in
respect of Indebtedness (including, without limitation, (v) any amortization of
debt discount, (w) net costs associated with Interest Swap Obligations
(including any amortization of discounts), (x) the interest portion of any
deferred payment obligation, (y) all accrued interest and (z) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers acceptances or similar facilities paid or accrued, or scheduled to be
paid or accrued, during such period other than in respect of Non-Recourse
Indebtedness); (ii) dividends on preferred stock of such Person (and preferred
stock of its subsidiaries (other than Non-Recourse Subsidiaries) if paid to a
Person other than such Person or its subsidiaries) declared and payable in cash;
(iii) the portion of any rental obligation of such Person or its subsidiaries
(other than Non-Recourse Subsidiaries) in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (iv) the
portion of any rental obligation of such Person or its subsidiaries (other than
Non-Recourse Subsidiaries) in respect of any Sale and Lease-Back Transaction
allocable to interest expense (determined as if such were treated as a Capital
Lease Obligation); and (v) to the extent any debt of any other Person is
guaranteed by such Person or any of its subsidiaries (other than Non-Recourse
Subsidiaries), (A) the aggregate amount of interest paid, accrued or scheduled
to be paid or accrued, by such other Person during such period attributable to
any such debt, LESS (B) to the extent included in (A) above, amortization or
writeoff of deferred financing costs of such Person and its subsidiaries during
such period and any charge related or any premium or penalty paid in connection
with redeeming or retiring any Indebtedness of such Person and its subsidiaries
prior to its stated maturity; in the case of both (A) and (B) above, after
elimination of intercompany accounts among such Person and its subsidiaries and
as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, PROVIDED that there shall be excluded therefrom, without duplication,
(i) any net income of any Non-Recourse Subsidiary, except that the Company's or
any Subsidiary's equity in the net income of such Non-Recourse Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or cash equivalents actually distributed by such
Non-Recourse Subsidiary during such period to the Company or such subsidiary as
a dividend or other distribution, (ii) gains and losses from Asset Sales or
reserves relating thereto, (iii) items classified as extraordinary (other than
the tax benefit, if any, of the utilization of net operating loss carryforwards
or alternative minimum tax credits), (iv) in the case of any computation of
Consolidated Net Income for purposes of determining compliance with Section
1009, the net income of any Person acquired by such specified Person (other than
a Non-Recourse Subsidiary) or any of its subsidiaries in a pooling-of-interests
transaction for any period prior to the date of such acquisition, (v) any gain
or loss, net of taxes, realized on the termination of any employee pension
benefit plan, (vi) the net income of any subsidiary of such specified Person to
the extent that the transfer to that Person of that income is not at the time
permitted, directly or indirectly, by any means (including by dividend,
distribution, advance or loan or otherwise), by operation of the terms of its
charter or any agreement with a Person other than with such specified Person,
instrument held by a Person other than by such specified Person, judgment,
decree, order, statute, law, rule or governmental regulations applicable to such
subsidiary or its stockholders, except for any dividends or distributions
actually paid by such subsidiary to such Person, (vii) the cumulative effect of
changes in accounting principles, and (viii) non-cash compensation expense for
management stock options and other incentive or benefit plans.
"Consolidated Net Tangible Assets" of any Person means, as of any date,
Consolidated Tangible Assets of such Person at such date, after deducting
therefrom (without duplication of deductions) all Consolidated Current
Liabilities of such Person at such date.
"Consolidated Net Worth" of any Person means, as of any date, the sum of
the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person
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and its subsidiaries on a consolidated basis at such date, each item determined
in accordance with GAAP, less amounts attributable to Redeemable Stock of such
Person or any of its subsidiaries.
"Consolidated Tangible Assets" of any Person means, as of any date, the
consolidated assets of such Person and its Subsidiaries at such date, after
eliminating intercompany items and after deducting from such total (i) the net
book value of all assets that would be classified as intangibles under GAAP
(including, without limitation, goodwill, organizational expenses, trademarks,
trade names, copyrights, patents, licenses and any rights in any thereof) and
(ii) any prepaid expenses, deferred charges and unamortized debt discount and
expense, each such item determined in accordance with GAAP.
"Continuing Director" means an individual who (i) is a member of the Board
of Directors of the Company and (ii) either (A) was a member of the Board of
Directors of the Company on the Issue Date or (B) whose nomination for election
or election to the Board of Directors of the Company was approved by vote of at
least 66 2/3% of the directors then still in office who were either directors on
the Issue Date or whose election or nomination for election was previously so
approved.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Determination Period" has the meaning specified under clause (i) of the
definition of "Consolidated Interest Coverage Ratio."
"Drillship Credit Facilities" means the Loan Agreement, dated as of
December 23, 1998, among Pride International, Inc., Compagnie Financiere de CIC
et de L'Union Europeenne and the Lenders set forth on Schedule I thereto,
relating to the Pride Angola drillship and the Loan Agreement, dated as of
December 23, 1998, among Pride International, Inc., Compagnie Financiere de CIC
et de L'Union Europeenne and the Lenders set forth on Schedule I thereto,
relating to the Pride Africa drillship.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such person, for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, and (v) any other non-cash charges.
"Fair Market Value" means, with respect to consideration received or to be
received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Fair Value" means, with respect to any asset or Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"Funded Indebtedness" means all Indebtedness incurred under any revolving
credit, letter of credit or working capital facility that matures by its terms,
or that is renewable at the option of any obligor therein to a date more than
one year after the date on which such Indebtedness is originally incurred.
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"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; PROVIDED,
HOWEVER, that all calculations made for purposes of determining compliance with
the provisions set forth in Articles 8 and 10 hereof shall utilize GAAP in
effect at the Issue Date.
"Indebtedness" as applied to any Person means, at any time, without
duplication, (i) any obligation of such Person, contingent or otherwise, for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) any obligation of such
Person for all or any part of the purchase price of Property or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable included in current liabilities incurred in respect of Property and
services purchased in the ordinary course of business; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable incurred in the ordinary course of business); (v) any
obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property (other than accounts payable incurred
in the ordinary course of business); (vi) any obligation of such Person issued
or assumed as the deferred purchase price of Property (other than accounts
payable incurred in the ordinary course of business); (vii) any Capital Lease
Obligation; (viii) any obligation of any other Person secured by (or for which
the obligee thereof has an existing right, contingent or otherwise, to be
secured by) any Lien on Property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person, the amount of such
obligation being deemed to be the lesser of the value of such Property or the
amount of the obligation so secured; (ix) any obligation of such Person in
respect of any letter of credit supporting any obligation of any other Person;
(x) the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any preferred stock of such Person); (xi)
any Interest Swap Obligation or Currency Hedge Obligation of such Person; and
(xii) any obligation which is in economic effect a guarantee, regardless of its
characterization (other than an endorsement in the ordinary course of business
or any performance guarantee), with respect to any Indebtedness of another
Person, to the extent guaranteed. For purposes of the preceding sentence, the
maximum fixed repurchase price of any Redeemable Stock or subsidiary preferred
stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Stock or subsidiary preferred stock
as if such Redeemable Stock or subsidiary preferred stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture; PROVIDED, HOWEVER, that if such Redeemable Stock or subsidiary
preferred stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock or subsidiary preferred stock.
The amount of Indebtedness of any Person at any date shall be (x) the
outstanding book value at such date of all unconditional obligations as
described above and (y) the maximum liability of any such contingent obligation
at such date.
"Interest Swap Obligations" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means with respect to any Person, any investment in another
Person, whether by means of a share purchase, capital contribution, loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures or prepayments or deposits in the
ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person or any guarantee of Indebtedness of any other
Person; PROVIDED, HOWEVER, that the term "Investment" shall not include any
transaction involving the purchase or other acquisition
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(including by way of merger) of Property (including Capital Stock) by the
Company or any Subsidiary in exchange for Capital Stock (other than Redeemable
Stock) of the Company. The amount of any Person's Investment shall be the
original cost of such Investment to such Person, PLUS the cost of all additions
thereto paid by such Person, and MINUS the amount of any portion of such
Investment repaid to such Person in cash as a repayment of principal or a return
of capital, as the case may be, but without any other adjustments for increases
or decreases in value, or writeups, writedowns or writeoffs with respect to such
Investment in determining the amount of any investment involving a transfer of
any Property other than cash, such Property shall be valued at its Fair Value at
the time of such transfer as determined in good faith by the board of directors
(or comparable body) of the Person making such transfer.
"Issue Date" means the date on which the Notes are first authenticated and
delivered under this Indenture.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or xxxxx x Xxxx or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Limited Recourse Indebtedness" means (i) Indebtedness with respect to the
two drilling/workover barge rigs owned by the Company's Venezuelan Subsidiary as
in effect on the Issue Date (the "Venezuelan Barge Financing"), (ii)
Indebtedness with respect to two drillships owned by certain Non-Recourse
Subsidiaries as in effect on the Issue Date (the "Angola/Africa Drillship
Financing") and (iii) Indebtedness incurred to finance the purchase,
acquisition, renovation or construction of capital assets and related items
(including interest added to principal), or refinancings thereof, (a) in respect
of which the recourse of the holder of such Indebtedness is effectively limited
to such capital assets and related items or (b) in which the recourse and
security are similar to (or more favorable to the Company and its Subsidiaries
than) the Venezuelan Barge Financing or the Angola/Africa Drillship Financing.
"Maturity" means the date on which the principal of a Note becomes due and
payable as provided therein or in this Indenture, whether at the Stated Maturity
or by declaration of acceleration or otherwise.
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of (i) all legal
and title expenses, commissions and other fees and expenses incurred, (ii) all
Federal, state, provincial, foreign, recording and local taxes payable as a
consequence of such Asset Sale, (iii) all payment made to any Person other than
the Company or a Subsidiary on any Indebtedness which is secured by such assets,
in accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale,
(iv) as for any Asset Sale by a Subsidiary, the equity interest in such Cash
Proceeds of any holder of Capital Stock of such Subsidiary (other than the
Company or any other Subsidiary) and (v) appropriate amounts to be provided by
the Company or any Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset Sale and
retained by the Company or any Subsidiary, as the case may be, after such Asset
Sale including pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale and (b) as to any
Bargain Purchase Contract, an amount equal to (i) that portion of the rental or
other payment stream arising under a Bargain Purchase Contract that represents
an amount in excess of the Fair Market Value of the rental or other payments
with respect to the pertinent
- 8 -
Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amounts set forth in clause (a) above, in
each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the Company
nor any other Subsidiary (i) provides credit support including any undertaking,
agreement or instrument which would constitute Indebtedness or (ii) is directly
or indirectly liable for such Indebtedness and (b) no default with respect to
such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against a Non-Recourse Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or its Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"Non-Recourse Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination will be designated a Non-Recourse Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of a
Non-Recourse Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company as a Non-Recourse Subsidiary so long as (a) neither
the Company nor any Subsidiary is directly or indirectly liable pursuant to the
terms of any Indebtedness of such Subsidiary subject to the proviso described
below; (b) no default with respect to any Indebtedness of such Subsidiary would
permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Company or any Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; (c) neither the Company nor any Subsidiary has made an
Investment in such Subsidiary unless such Investment was made pursuant to, and
in accordance with, Section 1009 hereof (other than Investments of the type
described in clause (i) of the definition of "Permitted Investments"); and (d)
such designation shall not result in the creation or imposition of any Lien on
any Property of the Company or any Subsidiary (other than any Permitted Lien or
any Lien the creation or imposition of which shall have been in compliance with
Section 1015 hereof); PROVIDED, HOWEVER, that with respect to clause (a), the
Company or a Subsidiary may be liable for Indebtedness of a Non-Recourse
Subsidiary if (x) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 1009 hereof, in each case at the time of
incurrence, or (y) the liability would be a Permitted Investment at the time of
designation of such Subsidiary as a Non-Recourse Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. The Board of Directors of the Company may designate any
Non-Recourse Subsidiary as a Subsidiary if, immediately after giving effect to
such designation, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Company could incur $1.00 of additional Indebtedness (not
including the incurrence of Permitted Indebtedness) under the first paragraph of
Section 1010 hereof and (iii) if any Property of the Company or any of its
Subsidiaries would upon such designation become subject to any Lien (other than
a Permitted Lien), the creation or imposition of such Lien shall have been in
compliance with Section 1015 hereof.
"Notes" means the 10% Senior Notes due 2009.
"Offered Notes" means $200,000,000 aggregate principal amount of the Notes
to be issued and sold on May 26, 1999.
"Permitted Indebtedness" means (a) Indebtedness of the Company under the
Offered Notes; (b) Indebtedness (and any guarantee or pledge thereof) under one
or more bank revolving credit facilities, as amended, extended, replaced or
refunded from time to time, in an aggregate principal amount at any one time
outstanding not to exceed the greater of (A) $100 million and (B) an amount
equal to 10% of Consolidated Net Tangible Assets determined as of the date of
the incurrence of such Indebtedness (plus interest and fees under such
facilities), less any amounts derived from Asset
- 9 -
Sales and applied to the permanent reduction of Indebtedness thereunder (and a
permanent reduction of the related commitment to lend thereunder) as
contemplated by Section 1013 hereof; (c) Indebtedness of the Company or any
Subsidiary under Interest Swap Obligations, PROVIDED that (i) such Interest Swap
Obligations are related to payment obligations on Indebtedness otherwise
permitted under the covenants described in Section 1010 hereof and (ii) the
notional principal amount of such Interest Swap Obligations does not exceed the
principal amount of the Indebtedness to which such Interest Swap Obligations
relate; (d) Indebtedness of the Company or any Subsidiary under Currency Hedge
Obligations, PROVIDED that (i) such Currency Hedge Obligations are related to
payment obligations on Indebtedness otherwise permitted under the covenants
described in Section 1010 hereof or to the foreign currency cash flows
reasonably expected to be generated by the Company and the Subsidiaries and (ii)
the notional principal amount of such Currency Hedge Obligations does not exceed
the principal amount of the Indebtedness and the amount of the foreign currency
cash flows to which such Currency Hedge Obligations relate; (e) Indebtedness of
the Company or any Subsidiary outstanding on the Issue Date; (f) the Subsidiary
Guarantees of the Notes and any assumption of the obligations guaranteed thereby
or subsidiary guarantees of the Senior Notes due 2007 (if such guarantees are
required by the indenture governing such Notes); (g) Indebtedness of the Company
or any Subsidiary in respect of bid performance bonds, surety bonds, appeal
bonds and letters of credit or similar arrangement issued for the account of the
Company or any Subsidiary, in each case in the ordinary course of business; (h)
Indebtedness of the Company to any Wholly Owned Subsidiary (but only so long as
it remains a Wholly Owned Subsidiary); (i) Indebtedness of any Subsidiary to the
Company or any Wholly Owned Subsidiary (but only so long as it remains a Wholly
Owned Subsidiary); (j) Indebtedness of the Company in connection with a purchase
of the Notes pursuant to a Change of Control Offer, PROVIDED that the aggregate
principal amount of such Indebtedness does not exceed 101% of the aggregate
principal amount of the Notes purchased pursuant to such Change of Control Offer
plus the related expenses of such purchase; PROVIDED, FURTHER, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Notes and (B) does not mature prior to one year following
the Stated Maturity of the Notes; (k) Permitted Refinancing Indebtedness
incurred with respect to Indebtedness incurred pursuant to clause (a), (b), (e),
(f) or (j) above and (l) Permitted Subsidiary Refinancing Indebtedness incurred
with respect to Indebtedness incurred pursuant to clause (a), (b), (e), (f) or
(j) above. So as to avoid duplication in determining the amount of Permitted
Indebtedness under any clause of this definition, guarantees of, or obligations
in respect of letters of credit supporting, Indebtedness otherwise included in
the determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having capital and surplus in excess of
$100 mullion; (b) commercial paper issued by any corporation, if such commercial
paper has credit ratings of at least "A-1" by S&P and at least "P-1" by Xxxxx'x;
(c) U.S. Government Obligations with a maturity of four years or less; (d)
repurchase obligations for instruments of the type described in clause (c); (e)
shares of money market mutual or similar funds having assets in excess of $100
million; (f) payroll advances in the ordinary course of business; (g) other
advances and loans to officers and employees of the Company or any Subsidiary,
so long as the aggregate principal amount of such advances and loans does not
exceed $500,000 at any one time outstanding; (h) Investments represented by that
portion of the proceeds from Asset Sales (1) that is not Cash Proceeds or (2)
that is deemed to be Cash Proceeds pursuant to the second sentence of the
definition of Cash Proceeds; (i) Investments made by the Company in its
Subsidiaries (or any Person that will be a Subsidiary as a result of such
Investment) or by a Subsidiary in the Company or in one or more Subsidiaries (or
any Person that will be a Subsidiary as a result of such Investment); and (j)
Investments in stock, obligations or securities received in settlement of debts
owing to the Company or any Subsidiary as a result of bankruptcy or insolvency
proceedings or upon the foreclosure, perfection or enforcement of any Lien in
favor of the Company or any Subsidiary, in each case as
- 10 -
to debt owing to the Company or any Subsidiary that arose in the ordinary course
of business of the Company or any such Subsidiary, provided that any stocks,
obligations or securities received in settlement of debts that arose in the
ordinary course of business (and received other than as a result of bankruptcy
or insolvency proceedings or upon foreclosure, perfection or enforcement of any
Lien) that are, within 30 days of receipt, converted into cash or cash
equivalents shall be treated as having been cash or cash equivalents at the time
received.
"Permitted Liens" means (a) Liens in existence on the Issue Date; (b)
Liens created for the benefit of the Notes; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation of,
such transaction), PROVIDED that such Lien relates solely to such Property and
the proceeds thereof and accessories and upgrades thereto; (d) Liens on Property
existing at the time of the acquisition thereof (and not incurred as a result
of, or in anticipation of, such transaction), PROVIDED that such Liens relate
solely to such Property and the proceeds thereof and accessories and upgrades
thereto; (e) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (f) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens and Liens for master's and crew's
wages and other similar maritime Liens, and incurred in the ordinary course of
business; (g) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of property and defects, irregularities and deficiencies
in title to real property that do not, individually or in the aggregate,
materially affect the ability of the Company and its Subsidiaries, taken as a
whole, to conduct the business presently conducted; (h) Liens for taxes or
assessments or other governmental charges or levies not yet due and payable, or
the validity of which is being contested by the Company or a Subsidiary in good
faith appropriate proceedings upon stay of execution or the enforcement thereof
and for which adequate reserves in accordance with GAAP or other appropriate
provision has been made; (i) Liens to secure Indebtedness incurred for the
purpose of financing all or a part of the purchase price or construction cost of
Property (including the cost of upgrading or refurbishing rigs or drillships)
acquired or constructed after the Issue Date, PROVIDED that (1) the principal
amount of Indebtedness secured by such Liens shall not exceed 100% of the lesser
of cost or Fair Market Value of the Property so acquired, upgraded or
constructed plus transaction costs related thereto, (2) such Liens shall not
encumber any other Property of the Company or any Subsidiary (other than the
proceeds thereof and accessions and upgrades thereto) and (3) such Liens shall
attach to such Property within 180 days of the date of the later of commencement
of commercial operations of such Property and completion of the construction,
acquisition, upgrade or improvement of such Property; (j) Liens securing Capital
Lease Obligations and other obligations, PROVIDED that such Liens secure Capital
Lease Obligations and other obligations which, when combined with (1) the
outstanding secured Indebtedness of the Company and its Subsidiaries (other than
Indebtedness secured by Liens described under clauses (b) and (i) hereof) and
(2) the aggregate amount of all other Capital Lease Obligations and other
obligations of the Company and its Subsidiaries, does not exceed 10% of the
Company's Consolidated Net Tangible Assets; (k) Liens to secure any extension,
renewal, refinancing or refunding (or successive extensions, renewals,
refinancings or refundings), in whole or in part, of any Indebtedness secured by
Liens referred to in the foregoing clauses (a), (b), (c), (d) and (i), PROVIDED
that such Liens do not extend to any other Property of the Company or any
Subsidiary (other than the proceeds thereof and accessions and upgrades thereto)
and the principal amount of the Indebtedness secured by such Liens is not
increased; (1) any charter or lease of drilling rigs in the ordinary of course
of business; (m) leases or subleases of property to other Persons in the
ordinary course of business; (n) Liens securing Non-Recourse Indebtedness; (o)
Liens securing Permitted Indebtedness described in clause (b) of the definitions
thereof; (p) judgment liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been only initiated for the
review of such judgment shall not have been finally terminated or the period
- 11 -
within which such proceedings may be initiated shall not have expired; (q)
rights of setoff of banks and other Persons; (r) other deposits made in the
ordinary course of business to secure liability to insurance carriers under
insurance or self-insurance arrangements; (s) Liens securing reimbursement
obligations under letters of credit, entered into in the ordinary course of
business if in each case such Liens cover only the title documents and related
goods (and any proceeds thereof) covered by the related letter of credit; and
(t) Liens or equitable encumbrances deemed to exist by reason or fraudulent
conveyance or transfer laws or negative pledge or similar agreements to refrain
from permitting Liens.
"Permitted Non-Recourse Subsidiary Refinancing Indebtedness" means
Non-Recourse Indebtedness of any Non-Recourse Subsidiary, incurred in exchange
for, or the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Non-Recourse Indebtedness of such Subsidiary which
outstanding Non-Recourse Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of this Indenture.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the Company,
which outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of this Indenture (excluding any Permitted
Indebtedness), PROVIDED that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is PARI PASSU with or subordinated in right
of payment to the Notes, then such new Indebtedness is PARI PASSU with or
subordinated, as the case may be, in right of payment (without regard to its
being secured) to, the Notes at least to the same extent as the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, (ii) such new
Indebtedness is scheduled to mature later than the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (iii) such new Indebtedness has
an Average Life at the time such Indebtedness is incurred that is greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, and (iv) such new Indebtedness is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Subsidiary incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance, refund or repurchase outstanding Indebtedness of such
Subsidiary, which outstanding Indebtedness was incurred in accordance with, or
is otherwise permitted by, the terms of this Indenture, PROVIDED that (i) if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased is
PARI PASSU with or subordinated in right of payment to the Notes, then such new
Indebtedness is PARI PASSU with or subordinated, as the case may be, in right of
payment (without regard to its being secured) to the Notes at least to the same
extent as the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (ii) such new Indebtedness is scheduled to mature later than the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, (iii)
such new Indebtedness has an Average Life at the time such Indebtedness is
incurred that is greater than the Average Life of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, and (iv) such new
Indebtedness is in an aggregate principal amount (or, if such indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in
- 12 -
excess of the amount of liability in respect thereof determined in accordance
with GAAP) plus the amount of reasonable fees, expenses and premium, if any,
incurred by the Company or such Subsidiary in connection therewith.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible.
"Qualified Equity Offering" means any public offering or private placement
of Capital Stock (other than Redeemable Stock) of the Company for cash
consummated after the Issue Date (other than an offering pursuant to a
registration statement on Form S-8 or any successor form or otherwise relating
to equity securities issuable under any employee benefit plan of the Company).
"Redeemable Stock" means, with respect to any Person, any equity security
that by its terms or otherwise is required to be redeemed, or is redeemable at
the option of the holder thereof, at any time prior to one year following the
Stated Maturity of the Notes or is exchangeable into Indebtedness of such Person
or any of its subsidiaries.
"Related Business" means any business related, ancillary or complementary
to the business of the Company and its Subsidiaries on the Issue Date.
"Replacement Asset" means a Property or asset that, as determined by the
Board of Directors of the Company as evidenced by a Board Resolution, is used or
is useful in a Related Business.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or make
any distribution in respect of, or purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company or any Affiliate of the Company, or
warrants, rights or options to acquire such Capital Stock, other than (x)
dividends payable solely in the Capital Stock (other than Redeemable Stock) of
the Company, or in warrants, rights or options to acquire such Capital Stock and
(y) dividends or distributions by a Subsidiary to the Company or to a Wholly
Owned Subsidiary; (ii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, prior to any scheduled
principal payment, scheduled sinking fund payment or other stated maturity,
Indebtedness of the Company or any Subsidiary which is subordinated in right of
payment to the Notes; or (iii) make any Restricted Investment in any Person.
"Sale and Lease-Back Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its subsidiaries.
"Senior Debt" means any Indebtedness incurred by the Company, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is subordinated in right of payment to the Notes, PROVIDED that Senior Debt will
not include (a) any liability for federal, state, local or other taxes owed or
owing by the Company, (b) any Indebtedness owing to any Subsidiaries of the
Company, (c) any obligations with respect to Capital Stock of the Company, (d)
any trade payables or (e) any Indebtedness that is incurred in violation of this
Indenture.
"Senior Notes due 2007" means the Company's 9 3/8% Senior Notes due 2007.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such Regulation is in
effect on the Issue Date.
- 13 -
"Stated Maturity," when used with respect to a Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Subsidiary Guarantor that is subordinated in right of payment to the Notes or
the Subsidiary Guarantees, as the case may be, and does not mature prior to one
year following the Stated Maturity of the Notes.
The term "subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries or
such Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such Person
and (iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Subsidiary" means a subsidiary of the Company other than a Non-Recourse
Subsidiary.
"Subsidiary Guarantee" means any guarantee of the Notes by any Subsidiary
Guarantor in accordance with the provisions described under Article Fourteen
hereof.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries, if
any, executing this Indenture and (ii) any Person that becomes a successor
guarantor of the Notes in compliance with the provisions described under Article
Fourteen hereof.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) above, are not callable or redeemable at the option of the
issuer thereof; or (iii) depository receipts issued by a bank or trust company
as custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock or other interests (including partnership interests)
in such Person entitling the holders thereof (whether at all times or at the
times that such class of Capital Stock has voting power by reason of the
happening of any contingency) to vote in the election of members of the board of
directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Voting Stock or other ownership interests in such Subsidiary, other than any
director's qualifying shares mandated by applicable law, is owned directly or
indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or
- 14 -
corporate citizens of such foreign jurisdiction in order for such Subsidiary to
transact business in such foreign jurisdiction, provided that the Company,
directly or indirectly, owns the remaining Capital Stock or ownership interest
in such Subsidiary and, by contract or otherwise, controls the management and
business of such Subsidiary and derives the economic benefits of ownership of
such Subsidiary to substantially the same extent as if such Subsidiary were a
wholly owned Subsidiary.
SECTION 1.2. SUPPLEMENT TO ARTICLE FOUR OF THE ORIGINAL INDENTURE. The
Original Indenture is supplemented with respect to the Notes by inserting the
following provision in Article Four:
Section 405. DISCHARGE OF SUBSIDIARY GUARANTEES. The obligations of
each Subsidiary Guarantor with respect to its Subsidiary Guarantee and
under this Indenture shall be discharged automatically to the same extent
as the obligations of the Company with respect to the Notes are discharged
pursuant to this Article Four, and such obligations of each Subsidiary
Guarantor so discharged shall be subject to reinstatement pursuant to
Section 404 in the event that such obligations of the Company shall be
reinstated.
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE. (a)
Section 501 of the Original Indenture is supplemented with respect to the Notes
by adding the following provisions (8)-(14) below:
(8) the Company fails to comply with any of its covenants or
agreements contained in Section 801 hereof or fails to make a Change of
Control Offer in accordance with Section 1017 hereof or an Asset Sale
Offer in accordance with Section 1013 hereof;
(9) default in the performance or breach of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Notes, any Subsidiary Guarantee or this Indenture (other than a covenant
or agreement a default in performance or breach of which is specifically
dealt with) and continuance of such default or breach for a period of 30
days after written notice thereof has been mailed, by registered or
certified mail, to the Company or such Subsidiary Guarantor by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the outstanding Notes;
(10) Indebtedness of the Company or any Subsidiary (other than
Non-Recourse Indebtedness or Limited Recourse Indebtedness) is not paid
when due within the applicable grace period or is accelerated by the
holders thereof and, in either case, the aggregate principal amount of
such due and unpaid or accelerated Indebtedness exceeds $10 million;
(11) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of any Subsidiary that constitutes
a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging such Subsidiary or Subsidiaries a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of such Subsidiary
or Subsidiaries under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Subsidiary or
- 15 -
Subsidiaries or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 90 consecutive days; or
(12) the commencement by any Subsidiary that constitutes a
Significant Subsidiary or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case of proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of such Subsidiary or
Subsidiaries in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Subsidiary or Subsidiaries, or the filing by such
Subsidiary or Subsidiaries, of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by such Subsidiary or Subsidiaries to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Subsidiary or Subsidiaries or of any substantial part of the property of
such Subsidiary or Subsidiaries, or the making by such Subsidiary or
Subsidiaries of an assignment for the benefit of creditors, or the
admission by such Subsidiary or Subsidiaries in writing of the inability
of such Subsidiary or Subsidiaries to pay the debts of such Subsidiary or
Subsidiaries generally as they become due, or the taking of corporate
action by such Subsidiary or Subsidiaries in furtherance of any such
action; or
(13) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Company or any Subsidiary in an uninsured
or unindemnified aggregate amount in excess of $10 million which remain
undischarged or unsatisfied for a period of 30 consecutive days after the
right to appeal them has expired; or
(14) any Subsidiary Guarantee shall for any reason cease to be, or
be asserted by the Company or any Subsidiary Guarantor, as applicable, not
to be, in full force and effect (except pursuant to the release of any
such Subsidiary Guarantee in accordance with this Indenture).
(b) The second sentence of Section 502 of the Original Indenture is
superseded with respect to the Notes by the following provision:
If an Event of Default described in clause (5), (6), (11) or (12) of
Section 501 shall occur, the principal amount of the Notes IPSO FACTO
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE.
Section 801 of the Original Indenture is superseded with respect to the Notes by
the following provisions:
Section 801. The Company will not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than
a merger of a Subsidiary into the Company in which the Company is the
continuing corporation), or sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of the Property and assets
of the Company and the Subsidiaries, taken as a whole, to any Person,
unless
- 16 -
(i) either (a) the Company shall be the continuing corporation
or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person
which acquires, by sale, assignment, conveyance, transfer, lease or
other disposition, all or substantially all of the Property and
assets of the Company and the Subsidiaries, taken as a whole (such
corporation or Person, the "Surviving Entity"), shall be a
corporation organized and validly existing under the laws of the
United States of America, any political subdivision thereof or any
state thereof or the District of Columbia, the Bahamas, Barbados,
Bermuda, the British Virgin Islands, the Cayman Islands, any of the
Channel Islands, France, the Netherlands or the Netherlands Antilles
and shall expressly assume, by a supplemental Indenture, the due and
punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance of the Company's
covenants and obligations under this Indenture;
(ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), no Event of Default or Default shall have occurred
and be continuing or would result therefrom;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity if the Company
is not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transactions;
(iv) immediately after giving effect to any such transaction
or series of transactions on a pro forma basis as if such
transaction or series of transactions had occurred on the first day
of the Determination Period, the Company (or the Surviving Entity if
the Company is not continuing) would be permitted to incur $1.00 of
additional Indebtedness pursuant to the tests described in the first
sentence under the caption Section 1010 hereof;
(v) in the event that the Company or the Surviving Entity is
organized in a jurisdiction other than the United States which is
different from the jurisdiction in which the obligor on the Notes
was organized immediately before giving effect to the transaction,
(a) the Company or such Surviving Entity, as applicable, delivers to
the Trustee an Opinion of Counsel stating that (1) the obligations
of the Company or the Surviving Entity, as applicable, are
enforceable under the laws of the new jurisdiction of its formation
subject to customary exceptions and (2) the holders of Notes will
not recognize any income, gain or loss for U.S. federal income tax
purposes as a result of the transaction and will be subject to U.S.
federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such transaction had
not occurred, (b) the Company or such Surviving Entity, as
applicable, agrees in writing to submit to jurisdiction and appoints
an agent for the service of process, each under terms substantially
similar to those contained in this Indenture with respect to the
- 17 -
Company, (c) the Company or such Surviving Entity, as applicable,
agrees in writing to pay Additional Amounts as provided under this
Indenture with respect to the Company, except that such Additional
Amounts shall relate to any withholding tax whatsoever regardless of
any change of law subject to exceptions substantially similar to
those contained in this Indenture and (d) the board of directors (or
comparable governing body) of the Company or such Surviving Entity,
as applicable, determines in good faith that such transaction will
have no material adverse effect on any holder of Notes and a board,
or other applicable, resolution to that effect is delivered to the
Trustee; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE.
(a) Section 901 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions at the end of Section 901:
(9) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Internal Revenue
Code of 1986 (the "Code"), or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(b) of the Code); or
(10) to add or, except as provided in Article IV or Section 1404,
release any Subsidiary Guarantor pursuant to the terms of this Indenture,
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
(b) Section 902 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions:
(4) modify the obligations of the Company to make a Change of
Control Offer (including reducing the premium payable thereon) pursuant to
Section 1017 hereof or an Asset Sale Offer pursuant to Section 1013
hereof; or
(5) subordinate in right of payment, or otherwise subordinate, the
Notes or any Subsidiary Guarantee to any other Indebtedness.
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE.
(a) Article 10 of the Original Indenture is supplemented with respect to
the Notes by adding "(a)" before the first paragraph of Section 1007 and adding
the following section at the end of Section 1007:
(b) Additional Amounts will be payable in the event the Company
becomes, or a successor to the Company is, a corporation organized or
existing under the laws of any of the Countries in which the Company may
become or a successor to the Company may be
- 18 -
organized which are listed in clause (i) of Section 801 hereof (each, a
"Permitted Country") and in the event the Company elects to redeem the
Notes pursuant to clause (d) of Section 1109. In such circumstances, all
payments made by the Company on the Notes will be made without deduction
or withholding, for or on account of, any and all present or future taxes,
duties, assessments, or governmental charges of whatever nature imposed,
levied, collected or assessed by or on behalf of any taxing authority in
such Permitted Country, unless the deduction or withholding of such taxes,
duties, assessments or governmental charges is then required by law. If
any deduction or withholding for or on account of any present or future
taxes, assessments or other governmental charges of such Permitted
Country, or any political subdivision or taxing authority thereof or
therein, shall at any time be required in respect of any amounts to be
paid by the Company under the Notes, the Company will pay or cause to be
paid such Additional Amounts as may be necessary in order that every new
payment of the principal of and interest on the Notes, after deduction for
withholding for or on account of any future tax, assessment or other
governmental charge will not be less than the amount provided for in the
Notes to be then due and payable; PROVIDED, HOWEVER, that the foregoing
obligation to pay Additional Amounts shall not apply in respect of:
(i) any tax, withholding, assessment or other governmental
charge which would not have been imposed but for (A) the existence
of any present or former connection between such Holder (or between
a fiduciary, settlor, beneficiary, member or shareholder of, or
possessor of a power over, such Holder, if such Holder is an estate,
trust, partnership or corporation) and a Permitted Country, or any
political subdivision or taxing authority thereof including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in trade
or business therein or having or had a permanent establishment
therein or (B) the presentation of a Note (where presentation is
required) for payment on a date more than 30 days after the date on
which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later, except
for Additional Amounts with respect to taxes that would have been
imposed had the holder presented the note for payment within such
30-day period;
(ii) any estate, inheritance, gift, sale, transfer or personal
property tax;
(iii) any tax, assessment or other governmental charge that is
withheld by reason of the failure to timely comply by the Holder or
the beneficial owner of the note with a request in writing of the
Company (which request shall be furnished to the Trustee) (A) to
provide information concerning the nationality, residence or
identity of the Holder or such beneficial owner or (B) to make any
declaration or other similar claim or satisfy any information or
reporting requirement, which, in the case of (A) or (B), is required
or imposed by a statute, treaty, regulation or administrative
practice of the taxing or domicile jurisdiction as a precondition to
exemption from or reduction of all or part of such tax, assessment
or other governmental charge; PROVIDED, HOWEVER, that this clause
(iii) shall not apply to limit the Company's obligation to pay
Additional Amounts if the completing and filing of the information
described in subclause (A) or the declaration or other claim
described in subclause (B) would be materially more onerous in form,
in procedure or in substance of information disclosed, in comparison
to the information reporting requirements imposed under U.S. tax law
with respect to Forms 1001, W-8 and W-9;
(iv) any tax which is payable otherwise than by withholding by
the Company or its paying agent; or
- 19 -
(v) any combination of items (i), (ii), (iii) and (iv) above;
nor shall Additional Amounts be paid with respect to any payment of
the principal of, or any interest on, any Note to any Holder who is
not the sole beneficial owner of such Note or is a fiduciary or
partnership, but only to the extent that a beneficial owner, a
beneficiary or a settlor with respect to a fiduciary or a member of
the partnership would not have been entitled to the payment of the
Additional Amount had the beneficial owner, beneficiary, settlor or
member of such partnership received directly its beneficial or
distributive share of the payment.
The Company will also (i) make (or cause to be made) such
withholding or deduction and (ii) remit (or cause to remitted) the full
amount deducted or withheld to the relevant authority in accordance with
applicable law. The Company will make reasonable efforts to obtain
certified copies of tax receipts evidencing the payment of any taxes so
deducted or withheld from each taxing authority imposing such taxes. The
Company will furnish to the Trustee as promptly as practicable after the
payment of any taxes so deducted or withheld is due pursuant to applicable
law, either certified copies of tax receipts evidencing such payment or,
if the receipts are not obtainable, other evidence of such payments by the
Company.
(b) Article 10 of the Original Indenture is supplemented with respect to
the Notes by inserting the following sections at the end thereof:
Section 1008. TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any Subsidiary to, directly or indirectly, conduct any
business, enter into or permit to exist any transaction or series of
related transactions, including, but not limited to, the purchase, sale or
exchange of Property, the making of any Investment, the giving of any
guarantee or the rendering of any service with any Affiliate of the
Company (other than transactions among the Company and any Wholly Owned
Subsidiaries) unless (i) such transaction or series of related
transactions is on terms set forth in writing which are no less favorable
to the Company or such Subsidiary than those that could be obtained in a
comparable arm's length transaction with a Person that is not such an
Affiliate and (ii) (a) with respect to a transaction or series of related
transactions that has a Fair Market Value in excess of $2 million but less
than $5 million, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with clause (i) above and (b) with respect to a transaction or
series of related transactions that has a Fair Market Value equal to or in
excess of $5 million, the transaction or series of related transactions is
approved by a majority of the Board of Directors of the Company (including
a majority of the disinterested directors), which approval is set forth in
a Board Resolution certifying that such transaction or series of
transactions complies with clause (i) above. The foregoing provisions
shall not be applicable to (i) reasonable compensation (including amounts
paid pursuant to employee benefit plans), indemnification paid or made
available to an officer, director or employee of the Company or a
Subsidiary for services rendered in such person's capacity as an officer,
director or employee or (ii) the making of any Restricted Payment
otherwise permitted by this Indenture.
Section 1009. LIMITATION ON RESTRICTED PAYMENTS. The Company will
not, and will not permit any Subsidiary to, make any Restricted Payment,
unless at the time of and after giving effect to the proposed Restricted
Payment (a) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom), (b) the Company could incur at
least $1.00 of additional Indebtedness under the tests described in the
first sentence under Section 1010 hereof and (c) the aggregate
- 20 -
amount of such Restricted Payment and all Restricted Payments (the amount
of any Restricted Payment not made in cash will be based on Fair Market
Value) declared or made on or after the Issue Date by the Company or any
Subsidiary shall not exceed the sum of (i) 50% (or if such Consolidated
Net Income shall be a deficit, minus 100% of such deficit) of the
aggregate Consolidated Net Income accrued during the period beginning on
the first day of the fiscal quarter in which the Issue Date falls and
ending on the last day of the fiscal quarter ending immediately prior to
the date of such proposed Restricted Payment, plus (ii) an amount equal to
the aggregate net cash proceeds received by the Company, subsequent to the
Issue Date, from the issuance or sale (other than to a Subsidiary or an
employee stock ownership plan or trust established by the Company for the
benefit of its employees) of shares of its Capital Stock, excluding
Redeemable Stock, but including Capital Stock issued upon the exercise of
options, warrants or rights to purchase Capital Stock (other than
Redeemable Stock) of the Company, and the liability (expressed as a
positive number) in accordance with GAAP in respect of any Indebtedness of
the Company or carrying value of Redeemable Stock, which has been
converted into, exchanged for or satisfied by the issuance of shares of
Capital Stock (other than Redeemable Stock) of the Company, subsequent to
the Issue Date plus (iii) to the extent not otherwise included in
Consolidated Net Income, the net reduction in Investments in Non-Recourse
Subsidiaries or joint ventures resulting from dividends, repayments of
loans or advances, releases or discharges of guarantees or other
obligations, or other transfers of assets, in each case to the Company or
a Subsidiary after the Issue Date from any Non-Recourse Subsidiary or
joint venture or from the redesignation of a Non-Recourse Subsidiary as a
Subsidiary (valued in each case as provided in the definition of
Investment), not to exceed in the case of any Non-Recourse Subsidiary or
joint venture the total amount of Investments (other than Permitted
Investments) in such Non-Recourse Subsidiary or joint venture made by the
Company and its Subsidiaries in such Non-Recourse Subsidiary or joint
venture existing on or made after the Issue Date, plus (iv) to the extent
not otherwise included in Consolidated Net Income or in clause (iii)
above, the total amount of Investments in joint ventures (calculated as of
the Issue Date) which have become Wholly Owned Subsidiaries of the Company
subsequent to the Issue Date, plus (v) $25 million.
The foregoing provisions will not prevent (A) the payment of any
dividend on Capital Stock of any class within 60 days after the date of
its declaration if at the date of declaration such payment would be
permitted by this Indenture PROVIDED that at the time of the declaration
of such dividend, no Default or Event of Default shall have occurred and
be continuing; (B) any repurchase or redemption of the Capital Stock or
Subordinated Indebtedness of the Company made by exchange for Capital
Stock of the Company (other than Redeemable Stock), or out of the net cash
proceeds from the substantially concurrent issuance or sale (other than to
a Subsidiary) of Capital Stock of the Company (other than Redeemable
Stock), PROVIDED that the net cash proceeds from such sale are excluded
from computations under clause (c)(ii) above to the extent such proceeds
are applied to purchase or redeem such Capital Stock or Subordinated
Indebtedness; and (C) any repurchase or redemption of Subordinated
Indebtedness of the Company solely in exchange for, or out of the net cash
proceeds from the substantially concurrent sale of, new Subordinated
Indebtedness of the Company, so long as such Subordinated Indebtedness (x)
is subordinated to the Notes at least to the same extent as the
Subordinated Indebtedness so exchanged, purchased or redeemed, (y) has a
stated maturity later than the stated maturity of the Subordinated
Indebtedness so exchanged, purchased or redeemed and (z) has an Average
Life at the time incurred that is greater than the remaining Average Life
of the Subordinated Indebtedness
- 21 -
so exchanged, purchased or redeemed. Restricted Payments permitted to be
made as described in the preceding sentence will be excluded in
calculating the amount of Restricted Payments thereafter, except such
Restricted Payments made as described in clause (A), which will be
included in calculating the amount of Restricted Payments thereafter.
Section 1010. LIMITATION ON INDEBTEDNESS. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, create, incur,
assume, suffer to exist, guarantee or otherwise become liable, with
respect to the payment of (collectively, "incur"), any Indebtedness (other
than Non-Recourse Indebtedness), unless after giving pro forma effect to
the incurrence of such Indebtedness, no Default or Event of Default would
occur, and the Consolidated Interest Coverage Ratio for the Determination
Period preceding the Transaction Date is at least 2.5 to 1.0.
Notwithstanding the foregoing, the Company or any Subsidiary may incur
Permitted Indebtedness. Any Indebtedness of a Person existing at the time
such Person became a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary.
Section 1011. LIMITATION ON SUBSIDIARY INDEBTEDNESS AND PREFERRED
STOCK. The Company will not permit any Subsidiary to incur, directly or
indirectly, any Indebtedness (other than Indebtedness of Non-Recourse
Subsidiaries) or issue any preferred stock except:
(a) Indebtedness or preferred stock issued to and held by the
Company or a Wholly Owned Subsidiary, so long as any transfer of
such Indebtedness or preferred stock to a Person other than the
Company or a Wholly Owned Subsidiary will be deemed to constitute
the issuance of such Indebtedness or preferred stock by the issuer
thereof;
(b) Indebtedness or preferred stock of a Subsidiary issued and
outstanding prior to the date on which such Subsidiary was acquired
by the Company (other than Indebtedness or preferred stock issued in
connection with or in anticipation of such acquisition);
(c) Indebtedness or preferred stock outstanding on the Issue
Date;
(d) Indebtedness described in clauses (b), (c), (d), (f) and
(g) under the definition of "Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of such
Subsidiary;
(f) Preferred stock issued in exchange for, or the proceeds of
which are used to refinance, repurchase or redeem, Indebtedness or
preferred stock described in clauses (b) and (c) of this paragraph
(the "Retired Indebtedness or Stock"), PROVIDED that the preferred
stock so issued has (i) a liquidation value not in excess of the
principal amount or liquidation value of the Retired Indebtedness or
Stock plus related expenses for redemption and issuance and (ii) a
redemption date later than the stated maturity or redemption date
(if any) of the Retired Indebtedness or Stock;
- 22 -
(g) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another Subsidiary
(other than Non-Recourse Indebtedness) in connection with a merger
of such Subsidiaries, PROVIDED that no Subsidiary or any successor
(by way of merger) thereto existing on the Issue Date shall assume
or otherwise become responsible for any Indebtedness of an entity
which is not a Subsidiary on the Issue Date, except to the extent
that a Subsidiary would be permitted to incur such Indebtedness
under this paragraph;
(h) Indebtedness to finance the construction and operation of
the drillships Pride Africa and Pride Angola pursuant to the
Drillship Credit Facilities, as in effect on the Issue Date, and any
refinancings or replacements thereof, and
(i) Indebtedness or preferred stock of any Subsidiary, which
when taken together with all other Indebtedness and preferred stock
of the Subsidiaries (except Indebtedness or preferred stock incurred
pursuant to clauses (a), (b), (d) and (h) of this Section and
clauses (e) and (f) of this covenant to the extent relating to
Indebtedness incurred pursuant to clauses (a), (b) and (d) of this
section), does not exceed at any one time outstanding the greater of
(i) $100 million and (ii) 15% of Consolidated Net Tangible Assets
determined as of the date of incurrence of such Indebtedness.
Section 1012. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, create, enter into any
agreement with any Person or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind which by
its terms restricts the ability of any Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on its Capital Stock to
the Company or any Subsidiary, (b) pay any Indebtedness owed to the
Company or any Subsidiary, (c) make loans or advances to the Company or
any Subsidiary or (d) transfer any of its Property or assets to the
Company or any Subsidiary except any encumbrance or restriction contained
in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or asset acquired after the
Issue Date, so long as such encumbrance or restriction relates only
to the Property or asset so acquired;
(iii) relating to any Indebtedness of any Subsidiary at the
date on which such Subsidiary was acquired by the Company or any
Subsidiary (other than Indebtedness incurred in anticipation of such
acquisition);
(iv) effecting a refinancing of Indebtedness issued pursuant
to an agreement referred to in the foregoing clauses (i) through
(iii), so long as the encumbrances and restrictions contained in any
such refinancing agreement, taken as whole, are no more restrictive
than the encumbrances and restrictions contained in such agreements;
- 23 -
(v) which constitute customary provisions restricting
subletting or assignment of any lease of the Company or any
Subsidiary or provisions in agreements that restrict the assignment
of such agreement or any rights thereunder;
(vi) which constitute restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property;
(vii) which constitute any temporary encumbrances or
restrictions with respect to a Subsidiary under an agreement that
has been entered into for the sale or disposition of all or
substantially all of the outstanding Capital Stock of or Property
and assets of each Subsidiary provided that such sale or disposition
is otherwise permitted under this Indenture;
(viii) which constitute customary restrictions on cash, other
deposits or assets imposed by customers and other persons under
contracts entered into in the ordinary course of business; or
(ix) which constitute provisions contained in agreements or
instruments relating to Indebtedness that prohibit the transfer of
all or substantially all of the assets of the obligor under that
agreement or instrument unless the transferee assumes the
obligations of the obligor under such agreement or instrument or
such assets may be transferred subject to such prohibition.
Section 1013. LIMITATION ON ASSET SALES. The Company will not engage
in, and will not permit any Subsidiary to engage in, any Asset Sale unless
(a) except in the case of (i) an Asset Sale resulting from the requisition
of title to, seizure or forfeiture of any Property or assets or any actual
or constructive total loss or an agreed or compromised total loss or (ii)
a Bargain Purchase Contract, the Company or such Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the Property subject to such Asset Sale;
(b) except in the case of an Asset Sale described in subclauses (i) or
(ii) of clause (a), at least 75% of such consideration consists of Cash
Proceeds or the assumption of Indebtedness (other than Subordinated
Indebtedness) of the Company or such Subsidiary relating to the Property
that was the subject of such Asset Sale and the release of the Company or
such Subsidiary from Indebtedness); (c) after giving effect to such Asset
Sale, the total non-cash consideration held by the Company from all such
Asset Sales does not exceed $10 million, and (d) the Company delivers to
the Trustee an Officers' Certificate, which Officers' Certificate shall be
conclusive, certifying that such Asset Sale complies with clauses (a), (b)
and (c); PROVIDED, HOWEVER, that the requirements set forth in clause (b)
and (c) shall not apply to an Asset Sale in which the Company exchanges
assets for assets that constitute Replacement Assets. The Company or such
Subsidiary, as the case may be, may apply the Net Available Proceeds from
each Asset Sale (x) to the acquisition of one or more Replacement Assets,
or (y) to repurchase or repay Senior Debt (other than Indebtedness owed to
the Company or an affiliate of the Company) (with a permanent reduction of
availability in the case of revolving credit borrowings); PROVIDED,
HOWEVER, that such acquisition or such repurchase or repayment shall be
made within 365 days after the consummation of the relevant Asset Sale.
The following amounts will be deemed to be cash for purposes of this
provision: (i) any liabilities of the Company or any Subsidiary (as
- 24 -
shown on the Company's or such Subsidiary's most recent balance sheet or
in the notes thereto), other than liabilities that by their terms are
subordinated to the Notes or the applicable Subsidiary Guarantee that are
assumed by the transferee of any such assets as a result of which the
Company and its subsidiaries are no longer obligated with respect to such
liabilities and (ii) any Indebtedness or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by
the Company or such Subsidiary into cash (to the extent of the cash
received) within 120 days of such Asset Sale.
Any Net Available Proceeds from any Asset Sale that are not used to
acquire Replacement Assets or to repurchase or repay Senior Debt within
365 days after consummation of the relevant Asset Sale constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall, or at any time after receipt of Excess
Proceeds, the Company may, at its option, make a pro rata offer to all
holders of Notes and other Indebtedness (excluding the Senior Notes due
2007; PROVIDED that the Company may make an offer to purchase such notes
in accordance with their terms) that ranks by its terms equally in right
of payment with the Notes and the terms of which contain substantially
similar requirements with respect to the application of net proceeds from
asset sales as are contained in the Indenture (an "Asset Sale Offer") to
purchase on a pro rata basis the maximum principal amount of the Notes and
other such Indebtedness in integral multiples of $1,000 that may be
purchased out of the Excess Proceeds, at a price in cash equal to 100% of
the outstanding principal amount thereof plus accrued interest, if any, to
the purchase date, in accordance with the procedures set forth in this
Indenture. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero and the Company may use any remaining
amount for general corporate purposes.
Within five business days after the Company is obligated to make an
Asset Sale Offer, the Company will send a written notice to holders of
Notes, accompanied by such information as the Company in good faith
believes will enable holders to make an informed decision with respect to
the Asset Sale Offer.
The Company will comply with any applicable tender offer rules
(including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required
under the circumstances described herein.
Section 1014. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The
Company will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Lease-Back Transaction unless (i) the proceeds
from such Sale and Lease-Back Transaction are at least equal to the Fair
Market Value of such Property being transferred and (ii) the Company or
such Subsidiary would have been permitted to enter into such transaction
under the tests described under Sections 1010, 1011 and 1015 hereof.
Section 1015. LIMITATION ON LIENS. The Company will not, and will
not permit any Subsidiary to, directly or indirectly, create, affirm,
incur, assume or suffer to exist any Liens on or with respect to any
Property of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that
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the Notes shall be secured equally and ratably with (or prior to) the
Indebtedness so secured, other than Permitted Liens.
Section 1016. LIMITATION ON NON-GUARANTOR SUBSIDIARIES. The Company
will not permit any Subsidiary that is not a Subsidiary Guarantor to
guarantee the payment of any Indebtedness of the Company unless: (i)(A)
such Subsidiary simultaneously executes and delivers a supplemental
Indenture to this Indenture providing for a Subsidiary Guarantee of the
Notes by such Subsidiary and (B), with respect to any guarantee of
Subordinated Indebtedness by a Subsidiary, any such guarantee shall be
subordinated to such Subsidiary's Subsidiary Guarantee at least to the
same extent as such Subordinated Indebtedness is subordinated to the
Notes; (ii) such Subsidiary waives, and agrees not in any manner
whatsoever to exercise any right or claim or take the benefit or advantage
of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Subsidiary as a result of any
payment by such Subsidiary under its Subsidiary Guarantee until such time
as the obligations guaranteed thereby are paid in full; and (iii) such
Subsidiary shall deliver to the Trustee an opinion of independent legal
counsel to the effect that such Subsidiary Guarantee has been duly
executed and authorized and constitutes a valid, binding and enforceable
obligation of such Subsidiary, except insofar as enforcement thereof may
be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar
as enforcement thereof is subject to general principles of equity;
PROVIDED that this covenant shall not be applicable to any guarantee of
any Subsidiary that (x) existed at the time such Person became a
Subsidiary of the Company and (y) was not incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary of the Company.
Further, a pledge of assets to secure any Indebtedness for which the
pledgor is not otherwise liable shall not be considered a guarantee.
Section 1017. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) Upon
the occurrence of a Change of Control, each Holder of Notes shall have the
right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall announce the Change of Control Offer via Dow
Xxxxx News Service and mail a notice to the Trustee and each Holder
stating: (1) that a Change of Control has occurred and that the Change of
Control Offer is being made pursuant to this Section 1017 and that all
Notes timely tendered shall be accepted for payment; (2) the purchase
price and the purchase date described below (the "Change of Control
Payment Date"); (3) the circumstances and relevant facts regarding the
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization); (4) that any Note not
tendered shall continue to accrue interest; (5) that, unless the Company
defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest, if any, after the Change of Control Payment Date; (6)
that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the fifth Business Day preceding the
Change of Control Payment Date; (7) that Holders shall be entitled to
withdraw their election if the Paying Agent
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receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder
is withdrawing his election to have the Notes purchased; and (8) that
Holders whose Notes are being purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. If any of the Notes
subject to a Change of Control Offer is in the form of a Global
Certificate, then such notice shall be modified in form but not substance
to the extent appropriate to accord with the procedures of the Depository
applicable to repurchases. The Change of Control Offer shall remain open
for at least 20 Business Days and until the close of business on the fifth
Business Day prior to the Change of Control Payment Date. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent
such laws and regulations are applicable in connection with the repurchase
of the Notes as a result of a Change of Control.
(b) On a date that is no earlier than 30 days nor later than 60 days
from the date that the Company mails or causes to be mailed notice of the
Change of Control to the Holders (the "Change of Control Payment Date"),
the Company shall, to the extent lawful, (i) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered
and (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail or deliver to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each
such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above shall be applicable
whether or not any other provisions of this Indenture are applicable.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 1017 and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
Section 1018. REPORTS. The Company and any Subsidiary Guarantors
shall file with the Commission, to the extent such filings are accepted by
the Commission and whether or not the Company has a class of securities
registered under the Exchange Act, the annual reports, quarterly reports
and other documents that the Company and the Subsidiary Guarantors would
be required to file if the Company were subject to Section 13 or 15 of the
Exchange Act, in each case on or before the dates on which such reports
and other documents would have been required to have been filed with the
Commission if the Company had been subject to Section 13 or 15
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of the Exchange Act, beginning with the Company's fiscal year ended
December 31, 1999. The Company shall also (i) file with the Trustee (with
exhibits), and provide to each Holder of Notes (without exhibits), without
cost to such Holder, copies of such reports and documents within 15 days
after the date on which the Company files such reports and documents with
the Commission or the date on which the Company would be required to file
such reports and documents if the Company were so required and (ii) if
filing such reports and documents with the Commission is not accepted by
the Commission or is prohibited under the Exchange Act, supply at the
Company's cost copies of such reports and documents (including any
exhibits thereto) to any Holder of Notes promptly upon written request.
The Company shall at all times comply with Trust Indenture Act ss. 314(a).
Section 1019. TAXES. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good
faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the
Notes.
Section 1020. STAY, EXTENSION AND USURY LAWS. Each of the Company
and the Subsidiary Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture;
and each of the Company and the Subsidiary Guarantors (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE.
Article Eleven of the Original Indenture is supplemented with respect to the
Notes by inserting the following section at the end thereof:
Section 1109. OPTIONAL REDEMPTION. (a) The Notes will not be
redeemable at the option of the Company prior to June 1, 2004. On or after
such date, the Notes will be redeemable at the option of the Company, in
whole at any time or in part from time to time, at the following prices
(expressed in percentages of the principal amount), if redeemed during the
12 months beginning June 1 of the years indicated below, in each case
together with interest accrued to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date):
YEAR PERCENTAGE
---- ----------
2004................................ 105.000%
2005................................ 103.333%
2006................................ 101.667%
2007 and thereafter................. 100.000%
(b) If fewer than all the Notes are redeemed, selection for
redemption will be made by the Trustee, by lot or by any other means the
Trustee determines to be fair and appropriate.
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(c) Notwithstanding the foregoing, at any time on or prior to June
1, 2002, the Company may redeem up to an aggregate of 33% of the principal
amount of Notes at a redemption price of 110% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date,
with the net proceeds from a Qualified Equity Offering, PROVIDED that at
least 67% of the aggregate principal amount of Notes remain outstanding
immediately after the occurrence of such redemption and PROVIDED, FURTHER,
that such redemption occurs within 60 days of the date of the closing of
such Qualified Equity Offering.
(d) The Notes may be redeemed at the option of the Company in whole
or in part, upon not less than 30 nor more than 60 days' notice, at any
time at 100% of the principal amount thereof, plus accrued and unpaid
interest to the date fixed for such payment if, as a result of any change
in or amendment to the laws, regulations or governmental policy having the
force of law of any Permitted Country (or of any political subdivision or
taxing authority thereof or therein) or any execution of or amendment to,
any treaty or treaties affecting taxation of which the Permitted Country
(or such political subdivision or taxing authority) is a party, which
becomes effective on or after the date of the Company's change in
organizational jurisdiction (i) the Company is required, or would be
required on the next succeeding interest payment date, to pay Additional
Amounts in respect of payments on the Notes as a result of the imposition
of Taxes imposed by a Permitted Country (or any political subdivision or
taxing authority thereof) and (ii) the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the
Company that do not require undue effort or costs. In addition, the
Company will also pay to holders on the redemption date any Additional
Amounts which would otherwise be payable; PROVIDED, HOWEVER, that no such
notice of redemption shall be given earlier than 180 days prior to the
earliest date on which the Company could be obligated to pay such
Additional Amounts if a payment in respect of the Notes were then due.
Prior to the publication of the notice of redemption in accordance
with the foregoing, the Company shall deliver to the Trustee an officer's
certificate stating that (x) the Company is entitled to effect such
redemption based on an Opinion of Counsel or written advice of an
independent tax counsel or accounting firm, such opinion or advice being
reasonably acceptable to the Trustee, that the condition referred to in
clause (i) of the immediately preceding paragraph is satisfied as a result
of such change, amendment or executed or amended treaty and (y) the
condition described in (ii) of the immediately preceding paragraph is
satisfied. Such notice, once delivered by the Company to the Trustee, will
be irrevocable.
SECTION 1.8. NEW ARTICLE FOURTEEN. The Original Indenture is supplemented
with respect to the Notes by inserting the following Article Fourteen:
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
Section 1401. SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor,
jointly and severally, shall unconditionally guarantee to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and
their respective successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
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overdue principal of and interest on premium and interest on the Notes, if
any, if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment
when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately. The Subsidiary Guarantors hereby
agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and covenants that
this Subsidiary Guarantee shall not be discharged (other than in
accordance with Article Four or Section 1404 of the Indenture) except by
complete performance of the obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or Subsidiary Guarantors, or any
custodian, trustee, liquidator or other similar official acting in
relation to either the Company or Subsidiary Guarantors, any amount paid
by either to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee,
on the other hand, (x) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Five for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (y) in the event of any declaration of acceleration
of such obligations as provided in Article Five, such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantors for the purpose of this Subsidiary Guarantee. In
order to provide for just and equitable contribution among the Subsidiary
Guarantors, in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under its
Subsidiary Guarantee, such Funding Subsidiary Guarantor shall be entitled
to a contribution from each other Subsidiary Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor
(including the Funding Subsidiary Guarantor) for all payments, damages and
expenses incurred by the Funding Subsidiary Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to any Subsidiary Guarantee. Each
Subsidiary Guarantor agrees that it will not be entitled to exercise any
right of subrogation or contribution in relation to the Holders of Notes
in respect of any obligations guaranteed hereby until payment in full of
all amounts guaranteed under this Section 1401.
Section 1402. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES. To
evidence its Subsidiary Guarantee set forth in Section 1401, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit B to the Second
Supplemental Indenture shall be endorsed by
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an Officer of such Subsidiary Guarantor on each Note thereafter
authenticated and delivered by the Trustee, that a supplement to this
Indenture shall be executed on behalf of such Subsidiary Guarantor by its
duly authorized officer in accordance with Section 1016 hereof and that
such Subsidiary Guarantor shall deliver to the Trustee an Opinion of
Counsel that the foregoing have been duly authorized, executed and
delivered by such Subsidiary Guarantor and that such Subsidiary
Guarantor's Subsidiary Guarantee is a valid and legally binding obligation
of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, fraudulent conveyance and other law affecting the rights of
creditors generally.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 1401 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on a supplement to this Indenture
or on the notation of Subsidiary Guarantee no longer holds that office at
the time the Trustee authenticates the Note on which a notation of
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder and whether upon original issue, registration of
transfer, exchange or otherwise, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Person
that is then a Subsidiary Guarantor.
Section 1403. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS. No Subsidiary Guarantor may consolidate with or merge with
or into (whether or not such Subsidiary Guarantor is the surviving
Person), another Person whether or not affiliated with such Subsidiary
Guarantor unless:
(a) subject to the provisions of Section 1404 hereof, the
Person formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee in respect
of the Notes, this Indenture and such Subsidiary Guarantor's
Subsidiary Guarantee;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(c) such transaction does not violate any of Sections 1008,
1009, 1010, 1011, 1012, 1014, 1015, 1016, 1017, 1018, 1019 and 1020.
Notwithstanding the foregoing, no Subsidiary Guarantor shall be
permitted to consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another Person pursuant to
the preceding sentence if such consolidation or merger would not be
permitted by Article Eight hereof.
In case of any such consolidation or merger and upon the assumption
by the successor Person, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations
of the Subsidiary Guarantor in respect of the Notes, this Indenture and
such Subsidiary Guarantor's Subsidiary Guarantee, such successor
corporation shall succeed to and be substituted for the
- 31 -
Subsidiary Guarantor with the same effect as if it had been named herein
as a Subsidiary Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of
the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All the Subsidiary Guarantees
so issued shall in all respects have the same legal rank and benefit under
this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles Eight and Ten hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the
Company, or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company.
Section 1404. RELEASES OF SUBSIDIARY GUARANTEES. In the event of a
sale or other disposition of all or substantially all of the assets of any
Subsidiary Guarantor to a Person that is not a Subsidiary or to a
Non-Recourse Subsidiary in a transaction that does not violate any
provisions of this Indenture, by way of merger, consolidation or
otherwise, or a sale or other disposition (including, without limitation,
by foreclosure) of all of the capital stock of any Subsidiary Guarantor,
then such Subsidiary Guarantor (in the event of a sale or other
disposition (including, without limitation, by foreclosure), by way of
such a merger, consolidation or otherwise, of all of the capital stock of
such Subsidiary Guarantor) or the Person acquiring the property (in the
event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor) shall be released and relieved of any
obligations under this Indenture and its Subsidiary Guarantee; PROVIDED
that the Net Available Proceeds of such sale or other disposition are
applied in accordance with Section 1013 hereof. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by the
Company in accordance with the provisions of this Indenture, including
without limitation Section 1013, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Subsidiary
Guarantor from its obligations under this Indenture and its Subsidiary
Guarantee. In the event of a release or discharge in full of all
obligations of any Subsidiary Guarantor in respect of all of its
guarantees of Indebtedness of the Company (other than the Notes), such
Subsidiary Guarantor shall, upon the written request of the Company, be
released and relieved of any obligation under this Indenture and its
Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect that such Subsidiary Guarantor has
been released or discharged in full from all of its obligations under all
of its guarantees of Indebtedness of the Company, the Trustee shall
execute any documents reasonably required in order to evidence the release
of such Subsidiary Guarantor from its obligations under this Indenture and
its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal
of and premium and interest on the Notes and for the other obligations of
any Subsidiary Guarantor under this Indenture.
Any Subsidiary Guarantor that is designated a Non-Recourse
Subsidiary in accordance with the terms of this Indenture shall be
released from and relieved of its
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obligations under this Indenture and its Subsidiary Guarantee. Any
Non-Recourse Subsidiary that ceases to be a Non-Recourse Subsidiary shall
thereupon execute a supplement to this Indenture in accordance with the
terms of this Indenture.
Section 1405. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY. For
purposes hereof, each Subsidiary Guarantor's liability shall be that
amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be limited to the lesser of (i)
the aggregate amount of the obligations of the Company under the Notes and
this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Subsidiary Guarantor "insolvent" (as such term is defined in
the federal Bankruptcy Law and in the Debtor and Creditor Law of the State
of New York) or (B) left it with unreasonably small capital at the time
its Subsidiary Guarantee of the Notes was entered into, after giving
effect to the incurrence of existing Indebtedness immediately prior to
such time; provided that, it shall be a presumption in any lawsuit or
other proceeding in which such Subsidiary Guarantor is a party that the
amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of
creditors of such Subsidiary Guarantor, or debtor in possession or trustee
in bankruptcy of such Subsidiary Guarantor, otherwise proves in such a
lawsuit that the aggregate liability of such Subsidiary Guarantor is
limited to the amount set forth in clause (ii). In making any
determination as to the solvency or sufficiency of capital of a Subsidiary
Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and
any other rights such Subsidiary Guarantor may have, contractual or
otherwise, shall be taken into account.
Section 1406. "TRUSTEE" TO INCLUDE PAYING AGENT. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this
Article Fourteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article Fourteen in place of the Trustee.
SECTION 1.9. EFFECT OF ARTICLE ONE. The supplements to the Original
Indenture set forth in Article One of this Second Supplemental Indenture affect
only the provisions of the Original Indenture as such provisions relate to the
Notes, the series of Securities comprised of the Notes and the rights, remedies
and obligations of the Company, the Subsidiary Guarantors, the Holders of Notes,
the Trustee and other Persons set forth in the Original Indenture as such
rights, remedies and obligations relate to the Notes. Unless otherwise expressly
set forth in a subsequent supplement to the Original Indenture, as supplemented
hereby, the supplements to the Original Indenture contained in Article One of
this Second Supplemental Indenture relate only to the series of Securities
comprised of the Notes.
ARTICLE TWO
THE NOTES
The Notes shall be issued in the form of one or more permanent global
Notes substantially in the form set forth on Exhibit A hereof, duly executed by
the Company and authenticated by the Trustee as provided in the Indenture. The
terms of the Notes set forth on Exhibit A hereto are incorporated by reference
herein as if set forth herein in their entirety.
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ARTICLE THREE
REPRESENTATIONS OF THE COMPANY
SECTION 3.1. AUTHORITY OF THE COMPANY. The Company is duly authorized to
execute and deliver this Second Supplemental Indenture, and all corporate action
on its part required for the execution and delivery of this Second Supplemental
Indenture has been duly and effectively taken.
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS. The Company warrants that
the recitals of fact and statements contained in this Second Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE FOUR
CONCERNING THE TRUSTEE
SECTION 4.1. ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and conditions
set forth in the Original Indenture and in this Second Supplemental Indenture,
to all of which the Company and the respective Holders of the Notes at any time
hereafter outstanding agree by their acceptance thereof.
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The recitals
and statements contained in this Second Supplemental Indenture shall be taken as
the recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this Second Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.1. RELATION TO THIS INDENTURE. The provisions of this Second
Supplemental Indenture shall become effective immediately upon the execution and
delivery hereof. This Second Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Original Indenture as fully
and with the same effect as if all such terms and provisions had been set forth
in the Original Indenture; PROVIDED, HOWEVER, such terms and provisions shall be
so included in this Second Supplemental Indenture solely for the benefit of the
Company, the Subsidiary Guarantors, the Trustee and the Holders of the Notes.
The Original Indenture is hereby ratified and confirmed and shall remain and
continue in full force and effect in accordance with the terms and provisions
thereof, as supplemented by this Second Supplemental Indenture, and the Original
Indenture and this Second Supplemental Indenture shall be read, taken and
construed together as one instrument.
SECTION 5.2. MEANING OF TERMS. Any term used in this Second Supplemental
Indenture which is defined in the Original Indenture shall have the meaning
specified in the Original Indenture, unless the context shall otherwise require.
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
- 34 -
SECTION 5.4. GOVERNING LAW. This Second Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, Pride International, Inc. has caused this Second
Supplemental Indenture to be executed in its corporate name by a duly authorized
officer and The Chase Manhattan Bank has caused this Second Supplemental
Indenture to be executed in its corporate name by a duly authorized officer, all
as of the date first above written.
PRIDE INTERNATIONAL, INC.
By: __________________________
Name: ________________________
Title: _______________________
THE CHASE MANHATTAN BANK
By: __________________________
Name: ________________________
Title: _______________________
- 35 -
EXHIBIT A
(FACE OF NOTE)
10% Senior Notes due 2009
CUSIP Number 000000XX0
No. $200,000,000
PRIDE INTERNATIONAL, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on June 1, 2009.
Interest Payment Dates: June 1 and December 1, beginning December 1, 1999
Record Dates: May 15 and November 15
[SEAL]
ATTEST: PRIDE INTERNATIONAL, INC.
By: ___________________________ By: ___________________________
Name: _________________________ Name: _________________________
Title: ________________________ Title: ________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
The Chase Manhattan Bank,
as Trustee
By: _____________________________
Authorized Officer
Dated:
A-1
(BACK OF NOTE)
10% Senior Note due 2009
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. (a) Pride International, Inc., a Louisiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate of 10% per annum, which interest shall be payable in cash semi-annually in
arrears on June 1 and December 1, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date"); PROVIDED
that the first Interest Payment Date shall be December 1, 1999. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of original issuance. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company will pay
interest to the Person who is the Holder of record of this Note as of the close
of business on the May 15 or November 15 immediately preceding such Interest
Payment Date, even if this Note is canceled after such record date and on or
before such Interest Payment Date. Principal, premium, if any, and interest, if
any, on this Note will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Chase Manhattan Bank, the
Trustee under the Indenture, will act as Registrar and Paying Agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company, any Subsidiary Guarantor or any other of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
May 1, 1997, as supplemented by a Second Supplemental Indenture dated as of May
[26], 1999 (collectively, the "Indenture") between the Company and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code xx.xx. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are general unsecured obligations of the Company limited in an
aggregate principal amount to $300,000,000 and will mature on June 1, 2009.
A-2
5. OPTIONAL REDEMPTION. (a) The Notes are not redeemable at the Company's
option prior to June 1, 2004. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month period
beginning on June 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2004.................................................... 105.000%
2005.................................................... 103.333%
2006.................................................... 101.667%
2007 and thereafter..................................... 100.000%
(b) Notwithstanding clause (a) of this Paragraph 5, prior to June 1, 2002,
the Company may, at its option, on any one or more occasions, redeem up to 33%
of the aggregate principal amount of Notes at a redemption price equal to 110%
of the principal amount thereof, plus accrued and unpaid interest thereon to the
redemption date, with the net proceeds of a Qualified Equity Offering; PROVIDED
that at least 67% of the aggregate principal amount of Notes must remain
outstanding immediately after the occurrence of such redemption; and provided,
further, that any such redemption shall occur within 60 days of the date of the
closing of such Qualified Equity Offering.
(c) The Notes may be redeemed at the option of the Company in whole or in
part, upon not less than 30 nor more than 60 days' notice, at any time at 100%
of the principal amount thereof, plus accrued and unpaid interest to the date
fixed for such payment if, as a result of any change in or amendment to the
laws, regulations or governmental policy having the force of law of any
Permitted Country (or of any political subdivision or taxing authority thereof
or therein) or any execution of or amendment to, any treaty or treaties
affecting taxation of which the Permitted Country (or such political subdivision
or taxing authority) is a party, which becomes effective on or after the date of
the Company's change in organizational jurisdiction (i) the Company is required,
or could be required on the next succeeding interest payment date, to pay
Additional Amounts in respect of payments on the Notes as a result of the
imposition of Taxes imposed by a Permitted Country (or any political subdivision
or taxing authority thereof) and (ii) the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the Company
that do not require undue effort or costs. In addition, the Company will also
pay to holders on the redemption date any Additional Amounts which would
otherwise be payable; PROVIDED, HOWEVER, that no such notice of redemption shall
be given earlier than 180 days prior to the earliest date on which the Company
could be obligated to pay such Additional Amounts if a payment in respect of the
Notes were then due.
Prior to the publication of the notice of redemption in accordance with
the foregoing, the Company shall deliver to the Trustee an officer's certificate
stating that (x) the Company is entitled to effect such redemption based on an
Opinion of Counsel or written advice of an independent tax counsel or accounting
firm, such opinion or advice being reasonably acceptable to the Trustee, that
the condition referred to in clause (i) of the immediately preceding paragraph
is satisfied as a result of such change, amendment or executed or amended treaty
and (y) the condition described in (ii) of the immediately preceding paragraph
is satisfied. Such notice, once delivered by the Company to the Trustee, will be
irrevocable.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
X-0
0. XXXXXXXXXX AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of
Control, each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of purchase (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Company will mail a notice to each Holder and the
Trustee describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
the Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
(b) If the Company or a Subsidiary consummates any Asset Sales permitted
by the Indenture, when the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall make an Asset Sale Offer to purchase the maximum
principal amount of Notes to which the Asset Sale Offer applies that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase, in accordance with the
procedures set forth in Section 1013 of the Indenture. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis, based on the
aggregate principal amount (or accreted value, as applicable) thereof
surrendered in such Asset Sale Offer. Upon the completion of an Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes initially issued are in
the form of a permanent Global Certificate, except as provided in this
Indenture. Under certain circumstances described in the Indenture, Notes may
also be issued in the form of permanent certificated Notes in registered form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of
A-4
a majority in aggregate principal amount of the then outstanding Notes. Without
notice to or consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act, to secure the Notes or to add or
release any Subsidiary Guarantor pursuant to the terms of the Indenture;
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes; (iii) failure by
the Company to comply with the provisions of Sections 801, 1013 and 1017 of the
Indenture; (iv) failure by the Company or any Subsidiary Guarantor for 30 days
after notice from the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with any of its other
agreements in the Indenture or the Notes; (v) any Subsidiary Guarantee shall for
any reason cease to be, or be asserted by the Company or any Subsidiary
Guarantor, as applicable, not to be, in full force and effect (except pursuant
to the release of any such Subsidiary Guarantee in accordance with the
Indenture); (vi) failure by the Company or any of its Subsidiaries to pay
Indebtedness of the Company or any Subsidiary (other than Non-Recourse
Indebtedness or Limited Recourse Indebtedness) when due within the applicable
grace period, which Indebtedness exceeds $10 million; (vii) the entry of a
judgment in an uninsured or underdemnified aggregate amount in excess of $10.0
million, which judgment is not paid or discharged for a period of 30 days; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Subsidiaries that constitute a Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company, any Subsidiary that constitutes a
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required, upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
A-5
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes, by accepting a Note, waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. SINKING FUND; ADDITIONAL AMOUNTS. There shall not be any sinking fund
with respect to the Notes. The Company shall not be obligated to pay Additional
Amounts with respect to the Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Pride International, Inc.
0000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
Attention: Xxxxxx Xxxxxxx
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's Social Security or tax I.D. No.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:__________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee: /*/_________________
______________________________
/*/ Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 1013 or 1017 of the Indenture, check the box below:
[ ] Section 1013 [ ] Section 1017
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 1013 or Section 1017 of the Indenture, state the
amount you elect to have purchased:
$-----------
Date: Your Signature:___________________
(Sign exactly as your name appears
on the Note)
Tax Identification No.:___________
Signature Guarantee: /*/__________
_____________________
/*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-8
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE
The following exchanges of a part of this Global Certificate for
Definitive Notes have been made:
PRINCIPAL AMOUNT OF
AMOUNT OF DECREASE AMOUNT OF INCREASE THIS GLOBAL SIGNATURE OF
IN PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT CERTIFICATE FOLLOWING AUTHORIZED OFFICER OF
OF THIS GLOBAL OF THIS GLOBAL SUCH DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE CERTIFICATE CERTIFICATE INCREASE) CUSTODIAN
------------------- ------------------------ --------------------------- --------------------------- ---------------------------
A-9
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on premium and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
thereunder shall be promptly paid in full or performed, all in accordance with
the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantors to the Holders of Notes and
to the Trustee pursuant to this Subsidiary Guarantee are expressly set forth in
Article 14 of the Indenture, and reference is hereby made to such Article for
the precise terms of this Subsidiary Guarantee. The terms of Article 14 of the
Indenture are incorporated herein by reference.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's obligations under the Notes and
the Indenture and shall inure to the benefit of the Trustee and the Holders of
Notes and their successors and assigns and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. Notwithstanding the foregoing, the Subsidiary Guarantees may be
discharged in accordance with Article IV of the Indenture and any Subsidiary
Guarantor that satisfies the provisions of Section 1404 of the Indenture shall
be released of its obligations hereunder. This is a Subsidiary Guarantee of
payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the Indenture and
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee of the Notes was
entered into, after giving effect to the incurrence of existing Indebtedness
immediately prior to such time; provided that, it shall be a presumption in any
lawsuit or other proceeding in which such Subsidiary Guarantor is a party that
the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that,
B-1
in making any determination as to the solvency or sufficiency of capital of a
Subsidiary Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and any
other rights such Subsidiary Guarantor may have, contractual or otherwise, shall
be taken into account.
Capitalized terms used herein have the same meanings given in that certain
Indenture dated as of May 1, 1997 between Pride Petroleum Services, Inc. and The
Chase Manhattan Bank, as Trustee, as supplemented by the Second Supplemental
Indenture dated as of May 26, 1999 between Pride International, Inc. and The
Chase Manhattan Bank, as Trustee, unless otherwise indicated.
[Name of Subsidiary Guarantor]
By:_________________________________
Name:_______________________________
Title:______________________________
B-2
