PURCHASE AGREEMENT BY AND AMONG WESTVILLE MANAGEMENT CORPORATION AND DRILLPETRO INC. TECHDRILL INC. AND PRIDE INTERNATIONAL, INC. SYNERGY GROUP CORP. AND PRIDE AMETHYST II LTD. DATED AS OF NOVEMBER 8, 2006
Exhibit 2.1
BY AND AMONG
WESTVILLE MANAGEMENT CORPORATION
AND
DRILLPETRO INC.
TECHDRILL INC.
AND
PRIDE INTERNATIONAL, INC.
SYNERGY GROUP CORP.
AND
PRIDE AMETHYST II LTD.
DATED AS OF NOVEMBER 8, 2006
This Purchase Agreement is dated as of November 8, 2006 by and among (1) Westville Management
Corporation, an international business company organized with limited liability under the laws of
the British Virgin Islands (“Buyer”), (2) Drillpetro Inc., an international business
company organized with limited liability under the laws of the Bahamas (“Drillpetro”), and
Techdrill Inc., an international business company organized with limited liability under the laws
of the Bahamas (“Techdrill” and together with Drillpetro, “Sellers”), (3) Synergy
Group Corp., a corporation organized under the laws of Panama (“Synergy”), and Pride
International, Inc., a corporation organized under the laws of the State of Delaware
(“Parent”), and (4) Pride Amethyst II Ltd., an international business company organized
with limited liability under the laws of the British Virgin Islands (the “Company”). Buyer,
Sellers, Synergy, Parent, and the Company may hereinafter be referred to individually as a
“Party” and together as the “Parties.”
W I T N E S S E T H
1.01 Definitions. For all purposes of this Agreement, the following capitalized terms shall
have the meanings set forth below:
“Adjusted Dayrate” shall mean, for any day with respect to a Rig under contract
with a Third-Party Customer, (i) the standard operating daily rate for such Rig for such day
specified under such contract, excluding (for the avoidance of doubt) any bonuses, less (ii)
the sum of (A) the Opex Adjustment for such Rig for such day and (B) the Capex Adjustment
for such Rig for such day.
“Affiliate” means, in respect of a referenced Person, any other Person that
directly or indirectly controls, is controlled by or is under common control with that
referenced Person (for purposes of this definition, “control” means, in respect of a Person,
the power to direct or cause the direction of the management or policies of that Person,
directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise);
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provided, however, that, for all purposes of this Agreement, Barrier Enterprises,
Barrier Resources, Drillpetro, Marwell, Techdrill and UKGB shall be deemed to be an
“Affiliate” of Synergy whether or not Barrier Enterprises, Barrier Resources, Drillpetro,
Marwell, Techdrill and UKGB meets the foregoing definition.
“Agreement” means this Purchase Agreement, including all Exhibits and Schedules
to this Purchase Agreement, and all amendments to any of the foregoing that may be made from
time to time in accordance with the terms of this Purchase Agreement.
“Amethyst IV” means that certain dynamically positioned, semi-submersible
drilling rig registered in the Bahamas as the Pride Rio de Janeiro.
“Amethyst V” means that certain dynamically positioned, semi-submersible
drilling rig registered in the Bahamas as the Pride Portland.
“Barrier Enterprises” means Barrier Enterprises (a.k.a. Barrier Interprises),
the entity that was a party to the Assistance and Brokerage Agreement, dated October 15,
1995, by and among Pride Amethyst, Barrier Enterprises and ▇▇▇▇▇▇ Corporation, S.A., as
amended from time to time.
“Barrier Resources” means Barrier Resources Limited, a company organized with
limited liability under the laws of the Bahamas.
“Benchmark Dayrate” shall mean, for any day with respect to a Rig, (a) if such
Rig is under contract with Petrobras, US$256,500 per day or (b) if such Rig is under
contract with any other customer, US$294,975 per day.
“BiGem” means BiGem Holdings N.V., a corporation organized with limited
liability under the laws of the Netherlands Antilles.
“Business Day” means a day upon which national banks operating in Houston,
Texas and New York, New York are open for business.
“Buyer” has the meaning given to that term in the first paragraph of this
Agreement.
“Buyer Indemnitees” has the meaning given to that term in Section 7.01.
“Buy-Sell Parties” means Buyer and Sellers.
“Capex Adjustment” shall mean, for any day with respect to a Rig, (i) the
difference equal to (A) the costs of any upgrade performed to the Rig after November 1, 2006
but on or prior to such day, minus (B) the sum of (1) any portion of such costs paid by the
customer for the Rig through an increase in the mobilization fee for such Rig that is
specifically identified in the contract with such customer as being in consideration of the
upgrade and (2) if the upgrade involves the replacement of any equipment, the fair market
value, if any, on the day of replacement of the used equipment that was replaced, divided by
(ii) the Economic Life of the upgrade.
“Chosen Court” means the United States District Court for the Southern District
of New York; provided, however, that, to the extent the last sentence of Section
11.04 would otherwise permit pursuit or enforcement of a remedy in a court other than the
United States District Court for the Southern District of New York, “Chosen Court” shall
mean any court of the State of New York sitting in the County of New York.
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“Closing” has the meaning given to that term in Section 3.01.
“Closing Date” has the meaning given to that term in Section 3.01.
“Company” has the meaning given to that term in the first paragraph of this
Agreement.
“Company Shares” means common shares, par value $1.00 per share, of the capital
stock of the Company.
“Conveyed Property” has the meaning given to that term in Section 11.01.
“Damages” means all liabilities, obligations, responsibilities, Taxes,
interest, demands, claims, actions, causes of action, controversies, assessments, losses,
damages, costs and expenses (including reasonable attorneys’ fees and expenses), whether
foreseen or unforeseen, matured or unmatured, known or unknown or accrued or not accrued.
“Drillpetro” has the meaning given to that term in the first paragraph of this
Agreement.
“Drillpetro Loan Interests” means any and all lender interests in loans made by
Drillpetro to the Company.
“Drillpetro Purchase Price” means cash in the aggregate amount of $168,928,571.
“Drillpetro Shares” means 5,776 Shares represented by the Company’s Share
Certificate No. 14.
“Earn-Out Payment” has the meaning given to that term in Section 2.04.
“Earn-Out Period” shall mean, with respect to a Rig, the period (a) starting
immediately after expiration of the current 5-year term of the contracts with Petrobras for
such Rig and (b) ending 6 years, plus an extension for a number of days equal to the length
of any Excluded Time, later; provided, however, that the Earn-Out Period shall exclude any
Excluded Time.
“Earn-Out Statement” has the meaning given to that term in Section 2.04 of this
Agreement.
“Economic Life” shall mean, with respect to an upgrade, (i) if the upgrade is
to the risers, cranes, BOP carrier or compensator, 4,380 days, (ii) if the upgrade is to the
structure of the Rig (including a pontoon or column), 9,125 days or (iii) in the case of any
other upgrade, the number of days in the firm term of the contract under which the Rig is
contracted at the time of the upgrade (or, if the Rig is not then under contract, next after
the time of the upgrade).
“Encumbrances” means mortgages, pledges, liens, encumbrances, security
interests, charges, claims, preemptive or subscription rights, rights of first refusal or
offer, options, put or call rights, warrants, consent rights, restrictive covenants,
easements, conditional and installment sale agreements, activity and use limitations, deed
restrictions and any other contractual limitations or restrictions or title imperfection of
any kind or nature (but, for the avoidance of doubt, shall not include restrictions on
transfer that may be imposed under federal, state, local, foreign and provincial securities
laws).
“Excluded Agreements” means those agreements listed on Schedule 1.01A.
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“Excluded Time” shall mean, with respect to a Rig, any period the Rig is under
contract with a customer but is not receiving the standard operating daily rate (a) because
it is in transit to a shipyard, at a shipyard or in transit back from a shipyard or (b)
because of force majeure or any equivalent concept (as defined in the contract with the
customer).
“Family Members” means the parents, siblings, children, and current or former
spouse(s) of a given individual.
“FCPA” has the meaning given to that term in Section 4.07.
“GAAP” means United States generally accepted accounting principles
consistently applied.
“Governmental Official” means any official, officer, employee, or
representative of any non-U.S. government department, agency or instrumentality (including
any government-owned or -controlled commercial enterprise, such as a government-controlled
oil company) or any outside consultancy group engaged thereby, or any official of a public
international organization or political party, or candidate for political office outside the
United States.
“Indemnifying Party” has the meaning given to that term in Section 7.03.
“Joint Venture Companies” means the Company, the Petrodrills, Pridemaritima,
Petrodrill Engineering and BiGem.
“Legislation” has the meaning given to that term in Section 4.07.
“Loan Interests” means the Drillpetro Loan Interests and the Techdrill Loan
Interests.
“Liability Limitations” has the meaning given to that term in Section 7.05.
“Marítima” means Marítima Petróleo e Engenharia Ltda., a privately held company
with limited liability organized under the laws of Brazil.
“Marwell” means Marwell Technologies Inc., a Bahamian company.
“Material Adverse Effect” means an event or events that, individually or in the
aggregate, (a) have had or could reasonably be expected to have a material adverse effect on
the business, results of operations or financial condition of the Company or any of its
Subsidiaries, including any event or events that have resulted or could reasonably be
expected to result in a loss, cost or diminution in value of $100,000 or more, (b) have had
or could reasonably be expected to have a material adverse effect on the ability of any
Party to perform its obligations under, or in connection with, this Agreement or any
Transaction Document or (c) prevent or could reasonably be expected to prevent the
consummation of any of the transactions contemplated by this Agreement or any Transaction
Document.
“Opex Adjustment” shall mean, for any day with respect to a Rig, the difference
equal to:
(i) the average daily operating costs of the Rig in respect of the 3-month period
ending on the date of expiration of the current 5-year term of the contracts with Petrobras
for such Rig, or anniversary thereof, last occurring on or prior to such day,
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including any third-party management, agency or similar fees incurred in respect of
such 3-month period; provided, however, that, if Pride reasonably determines that there has
been a change (such as a change in law or movement of the Rig to a new jurisdiction) such
that such average daily operating costs are not reflective of the actual operating costs of
the Rig on such day, Pride shall so notify Synergy and the amount described in this clause
(i) shall then be adjusted as reasonably determined by Pride to reflect the effects of such
change on the operating costs of the Rig on such day; minus
(ii) the average daily operating costs of the Rig in respect of the 3-month period
ending on the date hereof, excluding (A) any management, agency or similar fees incurred in
respect of such 3-month period to any member of the Synergy Group (including pursuant to the
Agency Agreements) and (B) any management fee incurred in respect of such 3-month period to
any affiliate of Pride.
Without limiting the proviso to clause (i) of this definition, for purposes of
calculating the average daily operating costs of a Rig in respect of the 3-month period
ending on the date of expiration of the current 5-year term of the contracts with Petrobras
for such Rig, any third-party management, agency or similar fees incurred in respect of such
3-month period shall be excluded, but Pride shall include in their place any third-party
management, agency or similar fees reasonably expected by Pride to be incurred in respect of
the next contract (or revised daily rate) for such Rig. In addition, for purposes of this
definition, any tax imposed on payments of charterhire pursuant to a contract with a
customer for a Rig shall be deemed to be operating costs of such Rig.
“Parent” has the meaning given to that term in the first paragraph of this
Agreement.
“Party” and “Parties” have the meanings given to those terms in the
first paragraph of this Agreement.
“Person” means any natural person, partnership, joint venture, corporation,
limited liability company, limited liability partnership, association, business,
unincorporated organization, trust, governmental authority, department or agency of a
governmental authority or any other entity or organization.
“Petrobras” means Petróleo Brasileiro S.A., a corporation organized under the
laws of Brazil.
“Petrodrill Corporation” means Petrodrill Corporation, a company organized
under the laws of the Bahamas.
“Petrodrill Corporation Stock Purchase Agreement” means the Stock Purchase
Agreement dated as of the date hereof, by and among Buyer, Sellers and Synergy.
“Petrodrill Engineering” means Petrodrill Engineering N.V., a corporation
organized with limited liability under the laws of the Netherlands Antilles.
“Petrodrill Five” has the meaning given to that term in the fourth paragraph of
this Agreement.
“Petrodrill Four” has the meaning given to that term in the fourth paragraph of
this Agreement.
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“Petrodrill Offshore” means Petrodrill Offshore Inc., an international business
company organized with limited liability under the laws of the Bahamas.
“Petrodrill Three” means Petrodrill Three Limited, an international business
company organized with limited liability under the laws of the British Virgin Islands.
“Petrodrill Two” means Petrodrill Two Limited, an international business
company organized with limited liability under the laws of the British Virgin Islands.
“Petrodrills” has the meaning given to that term in the third paragraph of this
Agreement.
“Pride Entities” means (i) Parent and its Affiliates, (ii) the respective
officers, directors, employees, agents, successors, predecessors, representatives, and
attorneys of the persons described in clause (i) and (iii) Pridemaritima, Petrodrill Four,
Petrodrill Five and the Company; provided, however, for the avoidance of doubt, that in no
case shall the term include Petrodrill Engineering, Petrodrill Corporation, Petrodrill Two,
Petrodrill Three and Petrodrill Offshore.
“Pride Foramer” means Pride Foramer S.A.S., a company organized with limited
liability under the laws of France.
“Pridemaritima” means Pridemaritima, Ltd. (formerly Formaritima, Ltd.), an
international business company organized with limited liability under the laws of the
British Virgin Islands.
“Pridemaritima Stock Purchase Agreement” means the Stock Purchase Agreement
dated as of the date hereof, by and among Buyer, Marítima and Parent.
“Prohibited Conduct” has the meaning given to that term in Section 4.07.
“Purchase Price” means the Drillpetro Purchase Price and the Techdrill Purchase
Price.
“Rig” means either of the Amethyst IV or the Amethyst V.
“Related Persons” means in respect of a referenced Person, the Affiliates of
such Person and the respective officers, directors, employees, agents, successors,
predecessors, representatives, and attorneys of such Person or any of its Affiliates.
“Relevant Buyer Affiliate” means each Related Persons of Buyer taking action,
or which Buyer is required to cause to take action, in connection with this Agreement or any
other Transaction Document or executing, or which Buyer is required to cause to execute,
this Agreement or any other Transaction Document.
“Relevant Synergy Affiliate” means each Related Persons of Synergy taking
action, or which Synergy is required to cause to take action, in connection with this
Agreement or any other Transaction Document or executing, or which Synergy is required to
cause to execute, this Agreement or any other Transaction Document.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Seller Indemnitees” has the meaning given to that term in Section 7.02.
“Seller Shares” means the Drillpetro Shares and the Techdrill Shares.
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“Sellers” has the meaning given to that term in the first paragraph of this
Agreement.
“Share” means a common share, par value $1.00 per share, of the capital stock
of the Company, including the corporate and financial rights pertaining to that common share
(including rights to dividends and distributions in shares or other securities, in kind, in
cash or otherwise) from and after the date of this Agreement.
“Shareholders” means Drillpetro, Techdrill and Buyer.
“Subsidiary” means, in respect of a referenced Person, any other Person of
which more than 50% of either the equity interests, or control, is directly or indirectly
beneficially owned by that referenced Person (for purposes of this definition, “control”
means, in respect of a Person, the power to direct or cause the direction of the management
or policies of that Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise).
“Synergy” has the meaning given to that term in the first paragraph of this
Agreement.
“Synergy Entities” means (i) Synergy and its owners (direct or indirect),
Affiliates and co-venturers (whether through a legal entity, by contract or other
arrangement or otherwise), (ii) the respective officers, directors, employees, agents,
successors, predecessors, representatives, and attorneys of the persons described in clause
(i), and (iii) Petrodrill Engineering, Petrodrill Corporation, Petrodrill Two, Petrodrill
Three and Petrodrill Offshore; provided, however, that in no case shall the term include
Pridemaritima, Petrodrill Four, Petrodrill Five and the Company.
“Taxes” means all federal, foreign, state and local net income, gross income,
gross receipts, sales, use, ad valorem, value-added, franchise, withholding, payroll,
employment, excise, property, excess profit or other taxes, together with any interest on
those taxes and any penalties, additions to tax or additional amounts applicable to those
taxes.
“Tax Returns” means returns, information returns and statements and reports in
respect of Taxes.
“Techdrill” has the meaning given to that term in the first paragraph of this
Agreement.
“Techdrill Loan Interests” means any and all lender interests in loans made by
Techdrill to the Company.
“Techdrill Purchase Price” means cash in the aggregate amount of $46,071,429.
“Techdrill Shares” means 1,574 Shares represented by the Company’s Share
Certificate No. 15.
“Third-Party Customer” shall mean, with respect to a Rig, a customer (other
than the owner of the Rig and its Related Persons) that has such Rig under contract.
“Transaction Documents” means all agreements, instruments, documents and other
writings referenced in, or contemplated by, this Agreement or executed in connection with
this Agreement or any of the agreements, instruments, documents and
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other writings referenced in, or contemplated by, this Agreement or executed in
connection with the transactions contemplated by this Agreement or any of the foregoing
agreements, instruments, documents or other writings.
“UKGB” means U.K. Guaranty & Bonding Corp. Limited, a Bahamian company.
“$” means the U.S. dollar, the legal currency of the United States of America.
1.02 Interpretation. In this Agreement, unless the context otherwise requires, the singular
shall include the plural, the masculine shall include the feminine and neuter and vice versa. The
terms “include,” “includes” and “including,” when used in this Agreement, shall be deemed to be
followed by the words “without limitation.” Each reference to an Article, Section, Exhibit or
Schedule in this Agreement shall be a reference to an Article or Section of, or Exhibit or Schedule
to, this Agreement unless otherwise specified. The words “hereof,” “herein,” “hereto” and
“hereunder” and words of similar import, when used in this Agreement, shall, unless otherwise
expressly specified, refer to this Agreement as a whole and not to any particular provision of this
Agreement. Each reference in this Agreement to a given agreement or instrument shall be a reference
to that agreement or instrument as amended, supplemented, restated or otherwise modified from time
to time. Headings in this Agreement are for the convenience of the Parties and have no effect on
the meaning of this Agreement. The Parties acknowledge that each Party and its counsel have
reviewed and revised this Agreement and that any rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
2.01 Transfer of Shares. In accordance with, and subject to the terms and conditions of,
this Agreement and the other Transaction Documents, Sellers shall, on the Closing Date, sell,
convey, transfer, assign, set over and deliver to Buyer, and Buyer shall purchase from Sellers, the
Seller Shares, free and clear of all Encumbrances.
2.02 Transfer of Loan Interests. In accordance with, and subject to the terms and
conditions of, this Agreement and the other Transaction Documents, Sellers shall, on the Closing
Date, sell, convey, transfer, assign, set over and deliver to Buyer, and Buyer shall purchase from
Sellers, the Loan Interests, free and clear of all Encumbrances.
2.03 Purchase Price. The total consideration payable by Buyer to Sellers for the sale,
conveyance, transfer, assignment, set-over and delivery of the Seller Shares and the Loan Interests
in accordance with Sections 2.01 and 2.02 shall be as follows:
(a) to Drillpetro for the Drillpetro Shares and the Drillpetro Loan Interests, the
Drillpetro Purchase Price; and
(b) to Techdrill for the Techdrill Shares and the Techdrill Loan Interests, the
Techdrill Purchase Price.
The total consideration shall be paid to Sellers in accordance with Section 3.02.
(a) If, for any day during the Earn-Out Period, either Rig is under a contract with a
Third-Party Customer at an Adjusted Dayrate in excess of the Benchmark Dayrate,
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then, for such day, Drillpetro shall be entitled to 30% of the difference equal to (x)
the Adjusted Dayrate for such Rig for such day, minus (y) the Benchmark Dayrate for such Rig
(the “Earn-Out Payment”). For the avoidance of doubt, such Earn-Out Payment shall be
payable in accordance with this Section 2.04 regardless of whether Buyer or any other Person
is the registered owner of the Rig.
(b) For each calendar month ending during the Earn-Out Period, Parent shall, within 30
days following the end of such month, cause to be prepared and delivered to Drillpetro a
statement (the “Earn-Out Statement”) calculating the Earn-Out Payment for such
month, if any.
(c) Each Earn-Out Payment shall be received by Drillpetro within 10 days following the
date of delivery of the applicable Earn-Out Statement by Parent, provided that Drillpetro
has designated a bank account for this payment that satisfies the requirements of Section
2.04(d) at least three Business Days prior to the date on which such payment is to be made.
(d) All Earn-Out Payments made to Synergy in connection with the Agreement shall be
paid into an account established and used exclusively for payments from the Pride Entities.
Drillpetro shall not permit any other transfers or deposits into such account prior to the
end of the Earn-Out Periods for both Rigs plus a period of three (3) months thereafter.
3.01 Time and Place. The (a) sale, conveyance, transfer, assignment, set over and delivery
of the Seller Shares and the Loan Interests to Buyer, (b) delivery of the Purchase Price to
Sellers, (c) consummation of the other transactions contemplated by this Agreement that, by their
nature, are to be consummated at the Closing shall take place at a closing (the “Closing”)
to be held at the offices of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m.
(or another mutually acceptable time and place) on the date of this Agreement (the time and date of
the Closing, the “Closing Date”).
3.02 Closing Sequence. The following actions in the sequence set forth in this Section 3.02
shall be taken at the Closing. The actions set forth in this Section 3.02 shall occur sequentially
but shall be deemed to occur simultaneously; provided, however, that none of the actions taken
pursuant to this Section 3.02 shall be valid, completed or binding until all of the actions to be
taken pursuant to this Section 3.02 have been completed.
(a) The parties to the agreements set forth on Schedule 3.02(a) shall cause the
cancellation and termination of, and release and discharge of duties, liabilities, covenants
and obligations under and in connection with, those agreements in accordance with a deed of
release, discharge, cancellation and termination substantially in the form of Exhibit A.
(b) The parties to the agreements set forth on Schedule 3.02(b) shall execute and
deliver a deed of partial release and discharge substantially in the form of Exhibit B in
respect of each of those agreements.
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(c) The parties to the agreements set forth on Schedule 3.02(c) shall execute and
deliver a supplemental deed substantially in the form of Exhibit C in respect of each of
those agreements.
(d) Drillpetro Shares, Techdrill Shares and Loan Interests
(i) Drillpetro shall deliver to Buyer a stock certificate representing the
Drillpetro Shares duly endorsed to Buyer or accompanied by a stock power duly
endorsed to Buyer.
(ii) Techdrill shall deliver to Buyer a stock certificate representing the
Techdrill Shares duly endorsed to Buyer or accompanied by a stock power duly
endorsed to Buyer.
(iii) Drillpetro, Techdrill, Buyer and the Company shall execute and deliver a
general assignment and assumption agreement relating to the Drillpetro Shares,
Techdrill Shares and Loan Interests substantially in the form of Exhibit D.
(iv) Drillpetro, Techdrill and Buyer shall execute any other instruments of
transfer of title required to transfer to Buyer good and valid title to the
Drillpetro Shares, Techdrill Shares and Loan Interests, free and clear of all
Encumbrances; and
(v) The Company shall cause the registration of the transfer of the Drillpetro
Shares and Techdrill Shares in accordance with this Section 3.02(d) to be reflected
in the share register of the Company.
(i) Buyer shall transfer the Drillpetro Purchase Price in immediately available
funds by wire transfer to an account or accounts specified by Drillpetro; and
(ii) Buyer shall transfer the Techdrill Purchase Price in immediately available
funds by wire transfer to an account or accounts specified by Techdrill;
(f) Synergy and each Seller shall cause those directors and officers of the Company and
each of the Petrodrills listed in Schedule 3.02(f) to resign as of the Closing Date and
shall provide to Buyer evidence of those resignations.
3.03 Deliveries by Sellers.
(a) In addition to any items the Sellers are required to deliver by other provisions of
this Agreement, each Seller shall, at the Closing, deliver or cause to be delivered to Buyer
the following items:
(i) copies of any and all governmental and other third-party consents, waivers
and approvals required by that Seller for the consummation of the transactions
contemplated by this Agreement, the Transaction Documents, the Petrodrill
Corporation Stock Purchase Agreement and the Transaction Documents (as defined in
the Petrodrill Corporation Stock Purchase Agreement);
(ii) copies, certified by an executive officer of each Seller for the benefit
of Buyer and Parent, of (A) that Seller’s certificate of incorporation,
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bylaws or similar governing instrument and (B) corporate resolutions
authorizing the execution and delivery of this Agreement, the Transaction Documents,
the Petrodrill Corporation Stock Purchase Agreement and the Transaction Documents
(as defined in the Petrodrill Corporation Stock Purchase Agreement) to which that
Seller is party; and
(iii) a certificate of an executive officer of each Seller for the benefit of
Buyer and Parent identifying the name and title and bearing the signature of the
officers of that Seller authorized to execute and deliver this Agreement, the
Transaction Documents, the Petrodrill Corporation Stock Purchase Agreement and the
Transaction Documents (as defined in the Petrodrill Corporation Stock Purchase
Agreement) to which that Seller is party.
(b) Each Seller shall, at the Closing, execute and deliver or cause to be executed and
delivered (i) written instructions to the Company’s depositary, stock transfer agent or
other appropriate party authorizing and directing the registration of the transfer of the
Seller Shares from that Seller to Buyer, (ii) any other instruments necessary to amend the
share registry of the Company to reflect the change in ownership of the Seller Shares and
(iii) any documents required to demonstrate to the Registrar of Companies of the British
Virgin Islands that the transfer of the Seller Shares from Sellers to the Buyer has
occurred.
3.04 Deliveries by Buyer. In addition to any items Buyer is required to deliver by other
provisions of this Agreement, Buyer shall, at the Closing, deliver or cause to be delivered to
Sellers and Synergy the following items:
(a) copies of any and all governmental and other third-party consents, waivers and
approvals required by Buyer for the consummation of the transactions contemplated by this
Agreement, the Transaction Documents, the Petrodrill Corporation Stock Purchase Agreement,
the Transaction Documents (as defined in the Petrodrill Corporation Stock Purchase
Agreement), the Pridemaritima Stock Purchase Agreement and the Transaction Documents (as
defined in the Pridemaritima Stock Purchase Agreement);
(b) copies, certified by the Secretary or Assistant Secretary of Buyer for the benefit
of Sellers and Synergy, of (i) Buyer’s certificate of incorporation, bylaws or similar
governing instrument and (ii) corporate resolutions authorizing the execution and delivery
of this Agreement, the Transaction Documents, the Petrodrill Corporation Stock Purchase
Agreement, the Transaction Documents (as defined in the Petrodrill Corporation Stock
Purchase Agreement), the Pridemaritima Stock Purchase Agreement and the Transaction
Documents (as defined in the Pridemaritima Stock Purchase Agreement) to which Buyer is
party; and
(c) a certificate of the Secretary or Assistant Secretary of Buyer for the benefit of
Sellers and Synergy identifying the name and title and bearing the signature of the officers
of Buyer authorized to execute and deliver this Agreement, the Transaction Documents, the
Petrodrill Corporation Stock Purchase Agreement, the Transaction Documents (as defined in
the Petrodrill Corporation Stock Purchase Agreement), the Pridemaritima Stock Purchase
Agreement and the Transaction Documents (as defined in the Pridemaritima Stock Purchase
Agreement) to which Buyer is party.
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3.05 Deliveries by Synergy. In addition to any items Synergy is required to deliver by
other provisions of this Agreement, Synergy shall, at the Closing, deliver or cause to be delivered
to Buyer and Parent the following items:
(a) copies of any and all governmental and other third-party consents, waivers and
approvals required by Synergy for the consummation of the transactions contemplated by this
Agreement, the Transaction Documents, the Petrodrill Corporation Stock Purchase Agreement
and the Transaction Documents (as defined in the Petrodrill Corporation Stock Purchase
Agreement);
(b) copies, certified by an executive officer of Synergy for the benefit of Buyer and
Parent, of (i) Synergy’s certificate of incorporation, bylaws or similar governing
instrument and (ii) corporate resolutions authorizing the execution and delivery of this
Agreement, the Transaction Documents, the Petrodrill Corporation Stock Purchase Agreement
and the Transaction Documents (as defined in the Petrodrill Corporation Stock Purchase
Agreement) to which Synergy is party; and
(c) a certificate of an executive officer of Synergy for the benefit of Buyer and
Parent identifying the name and title and bearing the signature of the officers of Synergy
authorized to execute and deliver this Agreement, the Transaction Documents, the Petrodrill
Corporation Stock Purchase Agreement and the Transaction Documents (as defined in the
Petrodrill Corporation Stock Purchase Agreement) to which Synergy is party.
Each of Synergy and Sellers represents and warrants to Buyer immediately prior to giving
effect to the transactions contemplated by this Agreement and the Transaction Documents that:
4.01 Incorporation; Qualification. Each of Synergy, Sellers and the other Relevant Synergy
Affiliates is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite power and authority to own, lease and
operate the properties and assets each currently owns, leases or operates and to carry on its
business as is currently being conducted. Each of Synergy, Sellers and the other Relevant Synergy
Affiliates is duly licensed or duly qualified to do business and is in good standing (to the extent
the concept of good standing is applicable in such jurisdiction) under the laws of each
jurisdiction in which the character of the properties and assets that it now owns, leases or
operates or the nature of the business it now conducts requires it to be so duly licensed or duly
qualified, except where the failure to be so duly licensed or duly qualified does not constitute a
Material Adverse Effect.
4.02 Authorization of Agreement. Each of Synergy, Sellers and the other Relevant Synergy
Affiliates has full corporate power and authority (a) to execute and deliver this Agreement and the
Transaction Documents to which it is party, (b) to consummate the transactions contemplated by this
Agreement and the Transaction Documents that are to be consummated by it, and (c) to perform all of
the terms and conditions of this Agreement and the Transaction Documents that are to be performed
by it. The execution and delivery by each of Synergy, Sellers and the other Relevant Synergy
Affiliates of this Agreement and the
12
Transaction Documents to which it is party, the consummation by each of Synergy, Sellers and the
other Relevant Synergy Affiliates of the transactions contemplated by this Agreement and the
Transaction Documents that are to be consummated by it and the performance by each of Synergy,
Sellers and the other Relevant Synergy Affiliates of all of the terms and conditions of this
Agreement that are to be performed by it have been duly authorized and approved by all requisite
corporate action on the part of each of Synergy, Sellers and the other Relevant Synergy Affiliates.
Each of Synergy, Sellers and the other Relevant Synergy Affiliates has duly and validly executed
and delivered this Agreement and the Transaction Documents to which it is party. This Agreement and
the Transaction Documents to which any of Synergy, Sellers or the other Relevant Synergy Affiliates
are parties constitute the legal, valid and binding obligations of those of Synergy, Sellers or the
other Relevant Synergy Affiliates that are parties thereto, enforceable against each of those of
Synergy, Sellers or the other Relevant Synergy Affiliates that are parties thereto in accordance
with their respective terms and conditions, except that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws affecting or relating to the enforcement of creditors’ rights generally and general
principles of equity (regardless of whether enforcement is considered in a proceeding in equity or
at law or under applicable legal codes).
4.03 Consents and Approvals; No Violation. Except as set forth in Schedule 4.03, neither
(a) the execution or delivery by each of Synergy, Sellers or the other Relevant Synergy Affiliates
of this Agreement or any of the Transaction Documents to which it is party, nor (b) the fulfillment
and compliance by each of Synergy, Sellers and the other Relevant Synergy Affiliates with the terms
and conditions of this Agreement or the Transaction Documents to be complied with by it, nor (c)
the consummation by each of Synergy, Sellers and the other Relevant Synergy Affiliates of the
transactions contemplated by this Agreement and the Transaction Documents that are to be
consummated by it will:
(a) conflict with, result in a breach of or require the consent of any Person under any
of the terms, conditions or provisions of the articles of association, memorandum of
association, articles of incorporation, bylaws or equivalent governing instruments of
Synergy, any Synergy Seller or any other Relevant Synergy Affiliate;
(b) violate any provision of, or require any filing, consent, authorization, notice or
approval under, any law, regulation, order, award, judgment, writ, injunction or decree
applicable to, or binding upon, Synergy, any Synergy Seller or any other Relevant Synergy
Affiliate;
(c) conflict with, result in a breach of or default (without regard to requirements of
notice or the lapse of time or both) under, give rise to any right of termination,
cancellation or acceleration under, or require any consent, authorization, notice or
approval under, the terms, conditions or provisions of (i) any mortgage, note, bond,
indenture, loan or credit agreement or other agreement or instrument evidencing indebtedness
for borrowed money to which any of Synergy, Sellers or the other Relevant Synergy Affiliates
is a party or by which any of them is bound or to which any of their properties is subject
or (ii) any other agreement, contract, lease, license or other instrument to which any of
Synergy, Sellers or the other Relevant Synergy Affiliates is a party or by which any of them
is bound or to which any of their properties is subject; or
13
(d) result in the creation or imposition of any Encumbrance on any of the assets of the
Company or any of its Subsidiaries or on any of the Shares or on any of the Loan Interests;
except, in the case of clauses (c) and (d) of this Section 4.03, to the extent of any matters that
do not, individually or in the aggregate, constitute a Material Adverse Effect.
4.04 No Brokers. Neither Synergy, any Seller or any other Synergy Related Person has,
directly or indirectly, employed any broker, finder or intermediary in connection with the
transactions contemplated by this Agreement or the Transaction Documents that might be entitled to
a fee or commission from Buyer, Parent, the Company or its Subsidiaries, or any Affiliate of Buyer
upon the execution of this Agreement or the Transaction Documents or the consummation of the
transactions contemplated by this Agreement and the Transaction Documents.
(a) The Drillpetro Shares, which consist of 5,776 common shares, par value $1.00 per
share, of the capital stock of the Company and constitutes 55% of such capital stock, are
owned beneficially and of record by Drillpetro, which holds good and valid title to the
Drillpetro Shares free and clear of all Encumbrances. The Techdrill Shares, which consist of
1,574 common shares, par value $1.00 per share, of the capital stock of the Company and
constitutes 15% of such capital stock, are owned beneficially and of record by Techdrill,
which holds good and valid title to the Techdrill Shares free and clear of all Encumbrances.
The Drillpetro Shares and the Techdrill Shares have been duly authorized and validly issued,
are fully paid and non-assessable and are currently issued and outstanding. None of the
Drillpetro Shares or the Techdrill Shares have been issued in violation of, or are subject
to, any third-party preemptive or subscription rights, rights of first refusal or offer,
options, put or call rights, warrants, consent rights, restrictive covenants or any other
agreements with any third party. Drillpetro has full legal right, power and authority to
sell, convey, transfer, assign, set over and deliver the Drillpetro Shares to Buyer in
accordance with, and subject to the terms and conditions of, this Agreement and the
Transaction Documents. Techdrill has full legal right, power and authority to sell, convey,
transfer, assign, set over and deliver the Techdrill Shares to Buyer in accordance with, and
subject to the terms and conditions of, this Agreement and the Transaction Documents.
Drillpetro will, at the Closing, sell, convey, transfer, assign, set over and deliver to
Buyer the Drillpetro Shares, free and clear of any and all Encumbrances, and Buyer will, at
the Closing, acquire good and valid title to the Drillpetro Shares, free and clear of any
and all Encumbrances. Techdrill will, at the Closing, sell, convey, transfer, assign, set
over and deliver to Buyer the Techdrill Shares, free and clear of any and all Encumbrances,
and Buyer will, at the Closing, acquire good and valid title to the Techdrill Shares, free
and clear of any and all Encumbrances. Drillpetro and Techdrill have fully paid and
otherwise discharged all Taxes and other duties, covenants, obligations and liabilities
under, or in connection with, the Drillpetro Shares and the Techdrill Shares.
(b) Drillpetro holds good and valid title to the Drillpetro Loan Interests free and
clear of all Encumbrances. Techdrill holds good and valid title to the Techdrill Loan
Interests free and clear of all Encumbrances. None of the Drillpetro Loan Interests or the
14
Techdrill Loan Interests have been repaid or discharged, in whole or in part. To the best
knowledge of Synergy and Sellers having made diligent inquiry, the Drillpetro Loan Interests
and the Techdrill Loan Interests are currently outstanding debt obligations of the Company.
Drillpetro has full legal right, power and authority to sell, convey, transfer, assign, set
over and deliver the Drillpetro Loan Interests to Buyer in accordance with, and subject to
the terms and conditions of, this Agreement and the Transaction Documents. Techdrill has
full legal right, power and authority to sell, convey, transfer, assign, set over and
deliver the Techdrill Loan Interests to Buyer in accordance with, and subject to the terms
and conditions of, this Agreement and the Transaction Documents. Drillpetro will, at the
Closing, sell, convey, transfer, assign, set over and deliver to Buyer the Drillpetro Loan
Interests, free and clear of any and all Encumbrances, and Buyer will, at the Closing,
acquire good and valid title to the Drillpetro Loan Interests, free and clear of any and all
Encumbrances. Techdrill will, at the Closing, sell, convey, transfer, assign, set over and
deliver to Buyer the Techdrill Loan Interests, free and clear of any and all Encumbrances,
and Buyer will, at the Closing, acquire good and valid title to the Techdrill Loan
Interests, free and clear of any and all Encumbrances. Drillpetro and Techdrill have fully
paid and otherwise discharged all Taxes and other duties, covenants, obligations and
liabilities under, or in connection with, the Drillpetro Loan Interests and the Techdrill
Loan Interests.
4.06 Liabilities to Sellers. Except as set forth in Schedule 4.06, none of the Company or
any of its Subsidiaries has any liability or obligation to Synergy, any Seller or any other Related
Person of Synergy and none of Synergy, any Seller or any other Related Person of Synergy (a) has
any authority to draw funds on any bank account maintained by or on behalf of the Company or any
Subsidiary of the Company, (b) has any outstanding power of attorney (i) granted by the Company or
any Subsidiary of the Company or (ii) relating to or affecting any of the assets or the conduct of
business of the Company or any Subsidiary of the Company, (c) is a director or officer of the
Company or either of the Petrodrills or (d) has any other legal or beneficial interest in the
Company, either of the Petrodrills or their respective assets.
(a) Sellers recognize that Parent is traded on the New York Stock Exchange, and that
this Agreement is governed by the laws of the United States of America. In addition,
Sellers recognize that the United States has enacted the Foreign Corrupt Practices Act, as
amended (“FCPA”), which, in general, prohibits the promise, payment or giving of
anything of value, either directly or indirectly, to any official of a non-U.S. government
for the purpose of influencing any act or decision in his official capacity, or inducing him
to use his influence with a non-U.S. government to assist in obtaining or retaining business
or any improper advantage. Brazil has also adopted laws to combat bribery, conflicts of
interest and/or corruption of Government Officials (hereinafter, with the FCPA, the
“Legislation”).
(b) Sellers are familiar with the Legislation and Sellers and all of their officers,
directors, employees, agents, shareholders, owners (direct or indirect), partners,
representatives, and consultants are and have been in compliance with the Legislation and
have not taken any action in connection with any business or activities related to the
Company or the Petrodrills which would cause any Party to be in violation of the
Legislation.
15
(c) None of Sellers’ officers, directors, employees, shareholders, or owners (direct or
indirect) are or have been themselves Government Officials at any time during the period
Sellers have held any interest in the Company or the Petrodrills. To the best of Sellers’
knowledge, none of the Family Members of any of Sellers’ officers, directors, employees,
shareholders, or owners (direct or indirect) are or have been Government Officials at any
time during the period Sellers have held any interest in the Company or the Petrodrills.
(d) Sellers and all of their officers, directors, employees, agents, shareholders,
owners (direct or indirect), partners, representatives, and consultants have not (unless
permitted under the Legislation) paid, promised to pay, authorized the payment, given,
promised to give, or authorized the giving of anything of value, including but not limited
to direct or indirect payments, gifts, entertainment, travel expenses, political or
charitable contributions, or services, to any Government Official, or to any third party at
the request of or for the benefit of any Government Official, for purposes of (i)
influencing any act or decision of such Government Official in his official capacity; (ii)
inducing such Government Official to do or omit to do any act in violation of the lawful
duty of such Government Official; (iii) securing any improper advantage; or (iv) inducing
such Government Official to use his influence with the government or instrumentality thereof
to affect or influence any act or decision of the government or such instrumentality, in
each case in connection with any business or activities related to the Company or the
Petrodrills (the “Prohibited Conduct”).
(e) With respect to any business or activities of the Company or the Petrodrills and
any payments made under this Agreement, (i) Sellers and all of their officers, directors,
employees, agents, shareholders, owners (direct or indirect), partners, representatives, and
consultants have not made, permitted, or assisted in making any off-the-books accounts,
inadequately identified transactions, recording of non-existent expenditures, entry of
liabilities with incorrect identification of their object or false documents; and (ii)
Sellers have kept books, accounts and records that, in reasonable detail, accurately and
fairly reflect all transactions and disposition of funds.
4.08 Disclosure. To the best knowledge of Synergy and Sellers having made diligent inquiry,
neither this Agreement nor any Transaction Document nor any letter, certificate or other document
furnished by Synergy, any Seller or any other Relevant Synergy Affiliate to Buyer or any Relevant
Buyer Affiliate or any of their representatives pursuant to this Agreement or any Transaction
Document or in connection with the subject matter of this Agreement or any Transaction Document
contains any untrue statement of a material fact or omits to state a material fact necessary to
make the statements contained therein and herein not misleading. There is no fact, event or
circumstance that constitutes a Material Adverse Effect that has not been set forth in this
Agreement or heretofore communicated to Buyer in writing. The Company owns beneficially and of
record 100% of the capital stock of each of the Petrodrills and holds good and valid title to such
capital stock. Petrodrill Four and Petrodrill Five owns beneficially and of record 100% of the
Amethyst IV and Amethyst V, respectively, and hold good and valid title to such Rigs. Except as set
forth in Schedule 4.08, the capital stock of each of the Petrodrills and the Rigs are free and
clear of all Encumbrances.
4.09 No Undisclosed Actions. None of Synergy, Sellers or any other Related Person of
Synergy has taken any action, or failed to take any action, in respect of the Company or either of
16
the Petrodrills or their respective ownership or operations or business (or caused the Company or
the Petrodrills to take any such action or fail to take any such action), nor, to the best
knowledge of Synergy and Sellers having made diligent inquiry, has the Company nor either of the
Petrodrills taken any such action, that has not been disclosed in writing to Buyer or been taken or
not taken without compliance with the Company’s or the Petrodrills’ governing documents, applicable
law, the Pride Amethyst II Shareholders’ Agreement dated March 9, 2001, by and among Sellers,
Parent, First Reserve Fund VI, Limited Partnership and First Reserve Fund VIII, L.P., or any other
agreements among some or all of the Parties to this Agreement or otherwise relating to or affecting
any of the assets or the conduct of business of the Company or any Subsidiary of the Company.
4.10 Foreign Source Income. Each of Synergy and each Seller is classified as a foreign
corporation for U.S. tax purposes or would be so classified if such classification were relevant
for any purpose. More than 80% of the gross income of each of Synergy and each Seller for the past
three years has been derived from sources without the United States.
Buyer hereby represents and warrants to Sellers and Synergy immediately prior to giving effect
to the transactions contemplated by this Agreement and the Transaction Documents that:
5.01 Incorporation; Qualification. Each of Buyer and the Relevant Buyer Affiliates is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite power and authority to own, lease and operate the properties
and assets each currently owns, leases or operates and to carry on its business as is currently
being conducted. Each of Buyer and the Relevant Buyer Affiliates is duly licensed or duly qualified
to do business and is in good standing (to the extent the concept of good standing is applicable in
such jurisdiction) under the laws of each jurisdiction in which the character of the properties and
assets that it now owns, leases or operates or the nature of the business it now conducts requires
it to be so duly licensed or duly qualified, except where the failure to be so duly licensed or
duly qualified does not constitute a Material Adverse Effect.
5.02 Authorization of Agreement. Each of Buyer and the Relevant Buyer Affiliates has full
corporate power and authority (a) to execute and deliver this Agreement and the Transaction
Documents to which it is party, (b) to consummate the transactions contemplated by this Agreement
and the Transaction Documents that are to be consummated by it, and (c) to perform all of the terms
and conditions of this Agreement and the Transaction Documents that are to be performed by it. The
execution and delivery by each of Buyer and the Relevant Buyer Affiliates of this Agreement and the
Transaction Documents to which it is party, the consummation by each of Buyer and the Relevant
Buyer Affiliates of the transactions contemplated by this Agreement and the Transaction Documents
that are to be consummated by it and the performance by each of Buyer and the Relevant Buyer
Affiliates of all of the terms and conditions of this Agreement that are to be performed by it have
been duly authorized and approved by all requisite corporate action on the part of each of Buyer
and the Relevant Buyer Affiliates. Each of Buyer and the Relevant Buyer Affiliates has duly and
validly executed and delivered this Agreement and the Transaction Documents to which it is party.
This Agreement and the Transaction Documents to which any of Buyer and the Relevant Buyer
Affiliates are parties constitute the legal, valid and binding obligations of those of Buyer and
the Relevant
17
Buyer Affiliates that are parties thereto, enforceable against each of those of Buyer and the
Relevant Buyer Affiliates that are parties thereto in accordance with their respective terms and
conditions, except that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws affecting or relating to
the enforcement of creditors’ rights generally and general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law or under applicable legal
codes).
5.03 Consents and Approvals; No Violation. Except as set forth in Schedule 5.03, neither
(a) the execution or delivery by each of Buyer and the Relevant Buyer Affiliates of this Agreement
or any of the Transaction Documents to which it is party, nor (b) the fulfillment and compliance by
each of Buyer and the Relevant Buyer Affiliates with the terms and conditions of this Agreement or
the Transaction Documents to be complied with by it, nor (c) the consummation by each of Buyer and
the Relevant Buyer Affiliates of the transactions contemplated by this Agreement and the
Transaction Documents that are to be consummated by it will:
(a) conflict with, result in a breach of or require the consent of any Person under any
of the terms, conditions or provisions of the articles of association, memorandum of
association, articles of incorporation, bylaws or equivalent governing instruments of Buyer
or any Relevant Buyer Affiliate;
(b) violate any provision of, or require any filing, consent, authorization, notice or
approval under, any law, regulation, order, award, judgment, writ, injunction or decree
applicable to, or binding upon, Buyer or any Relevant Buyer Affiliate; or
(c) conflict with, result in a breach of or default (without regard to requirements of
notice or the lapse of time or both) under, give rise to any right of termination,
cancellation or acceleration under, or require any consent, authorization, notice or
approval under, the terms, conditions or provisions of (i) any mortgage, note, bond,
indenture, loan or credit agreement or other agreement or instrument evidencing indebtedness
for borrowed money to which any of Buyer or the Relevant Buyer Affiliates is a party or by
which any of them is bound or to which any of their properties is subject or (ii) any other
agreement, contract, lease, license or other instrument to which any of Buyer or the
Relevant Buyer Affiliates is a party or by which any of them is bound or to which any of
their properties is subject;
except, in the case of clauses (b) and (c) of this Section 5.03, to the extent of any matters that
do not, individually or in the aggregate, constitute a Material Adverse Effect.
5.04 No Brokers. Neither Buyer or any Related Person of Buyer has, directly or indirectly,
employed any broker, finder or intermediary in connection with the transactions contemplated by
this Agreement or the Transaction Documents that might be entitled to a fee or commission from
Synergy, Sellers, the Company or its Subsidiaries, or any Affiliate of Synergy upon the execution
of this Agreement or the Transaction Documents or the consummation of the transactions contemplated
by this Agreement and the Transaction Documents.
5.05 Company Shares. Buyer has such knowledge and experience in financial and business
matters as enables it to evaluate the merits and risks of an investment in the Company Shares and
Westville has, independently and without reliance on Synergy, Sellers, the Company
18
or its Subsidiaries or any Affiliate of Synergy, made its own credit analysis and decision to
invest in the Company Shares. Buyer is an “accredited investor” as defined in Rule 501 under the
Securities Act. Buyer is acquiring the Company Shares for its own account and not with a view to
its resale or redistribution in violation of the Securities Act. Buyer knows and understands that
the Company Shares have not been registered under the Securities Act, that Buyer may not transfer
the Company Shares except pursuant to an effective registration statement under the Securities Act
or in a transaction which is exempt from the registration requirements of the Securities Act.
6.01 Covenants of Synergy. Synergy shall cause each Seller and each other Related Person of
Synergy to perform its duties, liabilities, covenants and obligations under, and in connection
with, this Agreement and the other Transaction Documents.
6.02 Covenant of Parent. Parent shall cause each Related Person of Parent to perform its
duties, liabilities, covenants and obligations under, and in connection with, this Agreement and
the other Transaction Documents.
6.03 Obligations of the Joint Venture Companies. Each of Parent, Buyer, Synergy and Sellers
shall vote or cause to be voted its shares and the shares of its Related Persons in, and shall take
or cause to be taken all actions that may be taken as a result of its direct or indirect interests
in, each Joint Venture Company to cause that Joint Venture Company to comply with its duties,
liabilities, covenants and obligations under, and in connection with, this Agreement and the other
Transaction Documents.
6.04 Release. Without limiting any other provisions of this Agreement, the Parties
agree that the rights, representations, warranties, covenants and any other obligations (whether in
respect of the period prior to, on or after the date hereof) of Pride Entities, on the one hand,
and Synergy Entities, on the other hand, to each other under any agreement, contract or other
arrangement that is not an Excluded Agreement are immediately waived, surrendered and terminated in
all respects. Parent shall cause the Pride Entities, and Synergy shall cause the Synergy Entities,
to honor and give effect to the foregoing release.
6.05 Removal from Litigation. If (and as soon as) it is possible under the litigation
relating to the original contracts for the Amethyst family of rigs without materially adversely
affecting, in Synergy’s reasonable opinion, Synergy’s profile for recovery of damages under such
litigation, Synergy shall cause that (a) the Company and its Subsidiaries, Petrodrill Six,
Petrodrill Seven and any other Affiliates of Parent be removed from such litigation and (b) any
powers of attorney or other authorities held by any member of the Synergy and its Related Persons
in respect of those companies be cancelled, terminated and returned to Pride.
6.06 FCPA Matters.
(a) From the Closing Date through the end of a period of five (5) years after the end
of the Earn-Out Periods for both Rigs, the Pride Entities and their duly authorized
representatives will have the right of access to, and the right of audit of, the books,
payrolls, and records maintained by Sellers relating to any of the business or activities of
19
the Company or the Petrodrills or any payments made under this Agreement. Sellers shall
cause such records to be retained for the same period of time.
(b) Sellers shall ensure that, with respect to any payment made hereunder, Sellers and
all of their officers, directors, employees, agents, shareholders, owners (direct or
indirect), partners, representatives, and consultants will comply with the Legislation and
will not take any action which would cause any Party to be in violation of the Legislation.
(c) If Sellers become aware that any of their officers, directors, employees,
shareholders, or owners (direct or indirect) or a Family Member of any such persons is or
has become a Government Official before the end of the Earn-Out Period for either Rig, they
promptly shall so notify Parent and Buyer.
(d) Sellers shall not engage in the Prohibited Conduct in respect of any payment made
hereunder.
(a) Sellers covenant that, with respect to any business or activities of the Company or
the Petrodrills and any payments made under this Agreement, (i) Sellers and all of their
officers, directors, employees, agents, shareholders, owners (direct or indirect), partners,
representatives, and consultants shall not make, permit, or assist in making any
off-the-books accounts, inadequately identified transactions, recording of non-existent
expenditures, entry of liabilities with incorrect identification of their object or false
documents; and (ii) Sellers shall keep books, accounts and records that, in reasonable
detail, accurately and fairly reflect all transactions and disposition of funds.
6.07 Further Assurances. From time to time before, on or after the Closing Date, each Party
shall, as and when reasonably requested by any other Party, execute and deliver or cause to be
executed and delivered to that other Party any and all additional agreements, documents,
instruments, disclosures, certifications, undertakings and writings, and take or cause to be taken
any and all further action, that, in the reasonable opinion of that other Party or its counsel, are
required to consummate the transactions contemplated by this Agreement or any Transaction Document
or to demonstrate or evidence compliance with the terms of this Agreement or any Transaction
Document or the accuracy of any representation or warranty set forth in this Agreement or any
Transaction Document.
7.01 Seller’s Agreement to Indemnify. SYNERGY AND SELLERS SHALL, ON A JOINT AND SEVERAL
BASIS, INDEMNIFY AND HOLD HARMLESS PARENT AND ITS RELATED PERSONS, WHICH (FOR THE AVOIDANCE OF
DOUBT) FROM AND AFTER THE CLOSING INCLUDES THE COMPANY AND ITS SUBSIDIARIES (THE “BUYER
INDEMNITEES”), FROM AND AGAINST ANY AND ALL DAMAGES ACTUALLY INCURRED BY ANY BUYER INDEMNITEE
ARISING OUT OF OR RELATING TO ANY OF THE FOLLOWING MATTERS: (I) ANY CLAIM OR CLAIMS BY WORKSHIPS
AGAINST THE COMPANY AND ITS SUBSIDIARIES FOR MANAGEMENT FEES WITH RESPECT TO THE RIGS, TO THE
EXTENT SUCH CLAIM OR CLAIMS RELATES TO THE PERIOD PRIOR TO NOVEMBER 1, 2006; (II) THE FATALITY AT
THE CIANBRO
20
SHIPYARD IN PORTLAND, MAINE RELATED TO THE AMETHYST IV THAT OCCURRED IN 2005 AND RELATED EVENTS;
AND (III) ANY OTHER FACT, EVENT OR CIRCUMSTANCE KNOWN TO SYNERGY OR ANY RELATED PERSON OF SYNERGY
(FOR THIS PURPOSE, ANY ACT OR OMISSION OF SYNERGY OR ANY RELATED PERSON OF SYNERGY SHALL BE DEEMED
TO BE KNOWN TO SYNERGY) AND NOT DISCLOSED TO PARENT PRIOR TO NOVEMBER 1, 2006; provided
that the indemnification obligations of Synergy and Sellers pursuant to this Section 7.01
(except to the extent arising out of or relating to (A) a breach by Synergy or any of its Related
Persons of this Agreement, any Transaction Document or any other provision that survives Section
6.04 or (B) any act or omission by Synergy or any of its Related Persons on its own behalf or in
its own name (as opposed to on behalf or in the name of the Company or either of the Petrodrills))
shall be limited to the difference equal to (a) 70% of any Damages actually incurred in the
aggregate by Parent, Synergy and their respective Related Persons (whether as a past or present
shareholder of the Company, by contract or other arrangement or otherwise) with respect to a
particular matter, less (b) any such Damages actually incurred directly by Synergy and its
Related Persons.
7.02 Buyer’s Agreement to Indemnify. PARENT AND BUYER SHALL, ON A JOINT AND SEVERAL BASIS,
INDEMNIFY AND HOLD HARMLESS SYNERGY AND ITS RELATED PERSONS (THE “SELLER INDEMNITEES”),
FROM AND AGAINST ANY AND ALL DAMAGES ACTUALLY INCURRED BY ANY SELLER INDEMNITEE ARISING OUT OF THE
CONDUCT OF THE BUSINESS OF THE COMPANY AND THE PETRODRILLS; provided that the
indemnification obligations of Parent and Buyer pursuant to this Section 7.02 shall not apply to
(a) the matters described in Section 7.01(i), (ii) and (iii) or (b) any Damages arising out of or
relating to (i) a breach by Synergy or any of its Related Persons of this Agreement, any
Transaction Document or any other provision that survives Section 6.04 or (ii) any act or omission
by Synergy or any of its Related Persons on its own behalf or in its own name (as opposed to on
behalf or in the name of the Company or either of the Petrodrills).
7.03 Defense of Claims. Synergy or Parent, whichever is providing indemnification under
Section 7.01 or Section 7.02 (the “Indemnifying Party”), shall have the right to assume the
defense of any claim to the extent it is providing indemnification under Section 7.01 or Section
7.02, including employing legal counsel. If the Indemnifying Party does not promptly assume the
defense of such claim, the indemnified Person may assume the defense of such claim, including
employing legal counsel of its choice. If the Indemnifying Party assumes the defense of a claim,
the indemnified Person has the right to employ at its own expense separate legal counsel and
participate in the defense of the claim, but the Indemnifying Party shall not be liable for any
settlement of a claim without its written consent to the settlement, which consent shall not be
unreasonably withheld. In addition, the Indemnifying Party may settle the claim, provided it does
not agree, without the consent of the indemnified Person, to any compromise or settlement that is
not an unconditional release of the indemnified Person from all liabilities other than the payment
of any money that will be paid by the Indemnifying Party. The costs of defending any claim by the
indemnified Person, if the Indemnifying Party does not promptly assume the defense, shall be
treated as Damages for purposes of Section 7.01 or Section 7.02, as applicable.
7.04 Notice of Claim. Each notice of a claim for indemnification pursuant to this Article
VII delivered by an indemnified Person to an Indemnifying Party shall set forth, with as much
specificity as is reasonably practicable, the basis for the claim and, to the extent reasonably
practicable, a reasonable estimate of the amount of Damages expected to be payable by the
21
Indemnifying Party pursuant its indemnification obligation under this Article VII (which estimate
shall not be conclusive or binding in any way).
7.05 No Set-off. The Indemnifying Party may not assert or claim any right of set-off
regarding amounts that are owing or are claimed to be owing under this Article VII.
7.06 Scope of Indemnities, Releases, Allocations of Liability and Waivers of Remedies, Damages
or Recourse. TO THE EXTENT PERMITTED BY APPLICABLE LAW BUT EXCEPT AS OTHERWISE PROVIDED IN THE
PROVISO TO SECTION 7.02, THE INDEMNITIES, RELEASES AND OTHER ALLOCATIONS AND WAIVERS OF, OR OTHER
LIMITATIONS ON, REMEDIES, LIABILITIES RECOURSE OR OTHER DAMAGES IN THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT (THE “LIABILITY LIMITATIONS”) SHALL APPLY NOTWITHSTANDING THE STRICT
LIABILITY OR NEGLIGENCE (INCLUDING GROSS NEGLIGENCE), WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE
OR PASSIVE, OF THE PERSON ATTEMPTING TO ENFORCE THE BENEFIT OF THE LIABILITY LIMITATION OR WHETHER
ASSERTED IN CONTRACT, IN WARRANTY, IN TORT, BY STATUTE OR OTHERWISE.
8.01 Liability for Taxes.
(a) The Company shall be responsible for filing or causing to be filed all Tax Returns
or reports of the Company and each of its Subsidiaries and for making or causing to be made
any required payments with respect to those returns or reports.
(b) Unless the Buy-Sell Parties otherwise agree in writing, or unless a Party which is
required to prepare a Tax Return shall have received an opinion of counsel that there is no
reasonable basis for preparing such return in compliance with the remainder of this
sentence, all Tax Returns (including amendments thereto) described in Section 8.01(a) filed
after the date of this Agreement for any taxable period ending on or before or including the
Closing Date, in the absence of a controlling change in law, shall be prepared on a basis
consistent with the elections, accounting methods, conventions and principles of taxation
used for the most recent taxable periods for which Tax Returns involving similar matters
have been filed. Upon request of a nonresponsible Buy-Sell Party, the party responsible for
preparation of a particular Tax Return for such periods under this Section 8.01(b) shall
make available a draft of such Tax Return (or relevant portions thereof) for review and
comment by such nonresponsible Party. Subject to the provisions of this Agreement, all
decisions relating to the preparation of Tax Returns shall be made in the sole discretion of
the party responsible under this Agreement for such preparation.
(c) Notwithstanding any other provision of this Agreement to the contrary, any
liability for stock transfer Taxes, stamp Taxes or similar Taxes incurred in connection with
this Agreement and the Transaction Documents and the transactions contemplated by this
Agreement and the Transaction Documents shall be borne by the Company, and the Company shall
file, to the extent required by law, all necessary Tax Returns and other documentation with
respect to all such Taxes.
22
(d) Sellers will cooperate with Buyer to enable the Company and/or either or both of
the Petrodrills to elect to be classified for U.S. federal tax purposes as a partnership or
a disregarded entity pursuant to Treas. Reg. section 301.7701-3 if and when Buyer, in its
sole discretion, determines that one or more of such elections will be made and requests
such cooperation. If Sellers are required to pay any U.S. federal income taxes solely as a
result of an election made pursuant to this Section 8.01(d), Buyer shall reimburse Sellers
for those U.S. federal income taxes; provided, however, that this sentence, as applicable to
a Seller, shall have no force or effect if that Seller is or has ever been engaged in any
U.S. trade or business or is or has ever been otherwise subject to U.S. federal income taxes
for any reason other than an election made pursuant to this Section 8.01(d).
8.02 Cooperation. Each Party shall provide another Party with any assistance that may
reasonably be requested by that other Party in connection with the preparation of any Tax Return,
any audit or other examination by any Taxing authority or any judicial or administrative
proceedings relating to liability for Taxes, and each of the Parties shall retain and provide the
requesting party with any records or information that may be relevant to such Tax Return, audit,
examination, proceedings or determination. The information obtained by each Party pursuant to this
Section 8.02 or pursuant to any other Section of this Agreement providing for the sharing of
information or review of any Tax Return or other schedule relating to Taxes shall be kept
confidential by the Parties.
Except as otherwise expressly provided in this Agreement, the remedies provided in this
Agreement shall be cumulative and shall not preclude assertion by any Party of any other rights or
the seeking of any other remedies, including equitable remedies.
Except to the extent specifically provided in this Agreement and whether or not the
transactions contemplated by this Agreement and the Transaction Documents are consummated, all
legal and other costs and expenses in connection with this Agreement and the Transaction Documents
and the transactions contemplated by this Agreement and the Transaction Documents shall be borne by
the Party that incurred such costs and expenses.
11.01 Survival of Representations and Warranties; No Other Representations. The
representations and warranties set forth in this Agreement and in any certificate or instrument
delivered in connection with this Agreement shall survive the Closing. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, ANY TRANSACTION DOCUMENT OR ANY OTHER PROVISION THAT SURVIVES SECTION
6.04, NEITHER SELLERS NOR ANY OF THEIR RESPECTIVE RELATED PERSONS MAKES ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND. BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
ANY TRANSACTION DOCUMENT OR ANY OTHER PROVISION THAT SURVIVES SECTION 6.04, THE DRILLPETRO
23
SHARES, TECHDRILL SHARES AND ANY PROPERTY OR ASSETS OWNED BY OR IN THE POSSESSION OF THE COMPANY OR
THE PETRODRILLS OR OTHERWISE USED IN CONNECTION WITH THE BUSINESS OF THE COMPANY OR THE PETRODRILLS
THAT MAY BE CONVEYED PURSUANT TO THIS AGREEMENT (COLLECTIVELY, THE “CONVEYED PROPERTY”)
SHALL BE CONVEYED “AS IS” AND “WHERE IS” AND “WITH ALL FAULTS” IN THEIR CONDITION ON NOVEMBER 1,
2006 AND THAT NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE
OR OTHERWISE, INCLUDING THOSE OF VALUE, PHYSICAL CONDITION, PERFORMANCE, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, SHALL EXTEND TO ANY OF THE CONVEYED PROPERTY AND THAT THOSE OTHER
REPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
11.02 Notices. All notices and other communications given under this Agreement shall be in
writing and shall be deemed to have been given when actually delivered to the recipient by
internationally recognized courier, telecopy or personal delivery. Such notices and other
communications shall be sent to the Parties at the respective addresses indicated below:
(A)
|
If to Buyer, Parent or the Company, to: | |
| Pride International, Inc. | ||
| Attn: Corporate Secretary | ||
| ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ | ||
| Telecopy: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | ||
(B)
|
If to Synergy or the Sellers, to: | |
| Synergy Group Corp. | ||
| ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, | ||
| ▇▇▇ ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇ | ||
| Telecopy: ▇▇▇ ▇▇-▇▇▇▇-▇▇▇▇ |
or to such other address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party.
11.03 Entire Agreement; No Waivers. This Agreement, together with the Schedules and
Exhibits to this Agreement, sets forth the entire agreement and understanding of the parties with
respect to the transactions contemplated by this Agreement and supersedes all prior agreements,
arrangements and understandings relating to the subject matter of this Agreement. This Agreement
may be amended, modified, superseded or canceled, and any of the terms, provisions,
representations, warranties or conditions of this Agreement may be waived, only by a written
instrument executed by all of the Parties or, in the case of a waiver, by the Party waiving
compliance. The failure of any Party at any time or times to require performance of any provision
of this Agreement shall in no manner affect the right of that Party later to enforce that
provision. No waiver by any Party of any condition, or of the breach of any term, provision,
representation or warranty contained in this Agreement or in any written statements, certificates
24
or other such documents to be delivered pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as (i) a further or continuing waiver of any such
condition or breach, (ii) a waiver of any other condition or breach or (iii) a breach of any other
term, provision, representation or warranty.
11.04 Governing Law; Jurisdiction; Venue. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES OF THOSE LAWS THAT WOULD
APPLY THE LAWS OF A DIFFERENT JURISDICTION. THE PARTIES HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE CHOSEN COURT FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND AGREE NOT TO COMMENCE ANY SUCH PROCEEDINGS
EXCEPT IN THE CHOSEN COURT. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN THE CHOSEN COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN THE CHOSEN COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HEREBY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. NOTWITHSTANDING THE FOREGOING, TO THE EXTENT THE OBTAINMENT OR ENFORCEMENT OF
A REMEDY BEING SOUGHT BY A PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT IS NOT POSSIBLE IN
THE CHOSEN COURT BECAUSE (A) THE CHOSEN COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, (B) THE
CHOSEN COURT DOES NOT HAVE THE ABILITY TO GRANT THE REMEDY SOUGHT OR (C) THE JUDGMENT OF THE CHOSEN
COURT MAY ONLY BE ENFORCED IN ANOTHER COURT, SUCH REMEDY MAY BE PURSUED OR ENFORCED IN A COURT
OTHER THAN THE CHOSEN COURT BUT ONLY TO THE EXTENT REQUIRED TO OVERCOME THE APPLICABLE IMPEDIMENT
SET FORTH IN ITEM (A), (B) OR (C) OF THIS SENTENCE.
11.05 Headings. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
11.06 Assignments and Third Parties. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assigns. No Party shall assign this
Agreement or any part of this Agreement without the prior written consent of the other Party,
except that any Party may, at any time after the Closing, assign its rights but not its obligations
under this Agreement to an Affiliate. This Agreement is intended solely for the benefit of the
Parties and nothing in this Agreement shall be construed to create any right in, any duty to, any
standard of care with reference to, or any liability to, any person that is not a Party, other than
those created by Section 6.04 in favor of the beneficiaries thereof.
11.07 Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by this Agreement is not affected in
any manner adverse to any Party. Upon any binding determination that any term or other
25
provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the Parties as closely as
possible to the end that the transactions contemplated by this Agreement may be completed to the
extent possible.
11.08 Counterparts. This Agreement may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original and all of which together shall constitute but
one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
26
| WESTVILLE MANAGEMENT CORPORATION |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: | Vice President, Secretary | |||
| DRILLPETRO INC. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Director | |||
| TECHDRILL INC. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Director | |||
| SYNERGY GROUP CORP. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Treasurer | |||
| PRIDE INTERNATIONAL, INC. |
||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Title: | Senior Vice President, Chief Financial Officer |
|||
| PRIDE AMETHYST II LTD. |
||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | Vice President | |||
Omitted Schedules
The schedules to this Agreement have been omitted pursuant to Item 601 of Regulation S-K.
Pride International, Inc. agrees to supplementally furnish a copy of any omitted schedule to the
Securities and Exchange Commission upon request. The contents of these omitted schedules is
identified below.
Schedule 1.01A
|
Excluded Agreements | |
Schedule 3.02(a)
|
Agreements subject to cancellation and termination pursuant to Section 3.02(a) | |
Schedule 3.02(b)
|
Agreements subject to partial release and discharge pursuant to Section 3.02(b) | |
Schedule 3.02(c)
|
Agreements to be supplemented pursuant to Section 3.02(c) | |
Schedule 3.02(f)
|
Directors and officers resigning pursuant to Section 3.02(f) | |
Schedule 4.03
|
Consent and approvals; no violations | |
Schedule 4.06
|
Liabilities to Sellers | |
Schedule 4.08
|
Disclosure | |
Schedule 5.03
|
Consent and approvals; no violations |